[This transcript was generated automatically from audio using AI and hasn't been reviewed by a person -- it can contain mistakes, including plausible-sounding sentences that were never actually said. Treat it as a starting point, not a verbatim record.]

[0:09] Good morning.
[0:12] Good morning, and welcome to the February 28th meeting of the Santa Cruz County Board of Supervisors. Could we start with a roll call?
[0:21] Supervisor Friend, Coonerty, Caput, McPherson, Terry Leopold.
[0:29] Here.
[0:31] We start this meeting with a moment of silence in the Pledge of Allegiance.
[0:35] Today's moment of silence, I'd like to remember a member of the county family who passed away unexpectedly.
[0:43] I want to refer a little bit from his obituary, Bill Manov was a long time resident of Santa Cruz who recently retired after 28 years of dedicated public service as the Santa Cruz County alcohol and drug program director.
[0:57] For more than 41 years, Bill served tirelessly as an advocate in the field of substance use disorder treatment.
[1:04] he was a community builder who positively impacted the lives of many people in need.
[1:10] More importantly, Bill was a kind and caring human being who never failed to bring a smile to those around him.
[1:17] His positive outlook on life was infectious and his capacity to love boundless.
[1:23] Bill was always took time to hear what others had to say and his wise counsel and good humor left everyone in his orbit better equipped to face their challenges.
[1:33] At home, Bill was completely devoted to family and his favorite told memories were centered
[1:39] on the rich life he shared with them.
[1:41] Bill adored his children and through them found great hope for the world in its future.
[1:46] Bill's great love and music found expression in his guitar playing with a local blues band
[1:50] for many years in his talented songwriting.
[1:53] More recently he had begun to explore the wonders of the jazz guitar.
[1:57] Bill loved nature, particularly its majestic high mountain ranges.
[2:01] He could frequently be spotted along nature's hiking trails with his backpack or skiing its graceful slope.
[2:09] On behalf of the board, I just want to share that our thoughts are with his family during this difficult time
[2:15] and may his memory be a blessing.
[2:17] And as we take our moment of silence, please think of Bill and his contributions.
[2:47] Good
[2:54] morning, Ms. Morello.
[2:56] Are there any late additions to the agenda?
[2:58] Good morning. We do have a few. I want to thank you for those kind words about Dr. Manoff. We're all going to miss him very much.
[3:05] Today there are public comments that are related to specific items on the agenda that are available for viewing electronically on the county's website.
[3:14] In addition, we have a number of changes on the consent agenda item 15. We have additional materials which is an administrative form 29
[3:23] line for the multidisciplinary interview center facility lease.
[3:29] That's attachment B. On item 32 we have a replacement board memo.
[3:34] The subject line is corrected to read by annual report of the first five commission.
[3:40] We have an agenda to the consent agenda which is item 46.1 to accept the letter opposing
[3:47] Governor Brown's decision to cease operation of the coordinated care initiative and dismantle
[3:53] the county in-home supportive services maintenance of effort, cost sharing, arrangement, and directing
[3:58] the chair to write letters as outlined. And that says recommended by Chair Leopold and
[4:04] Supervisor McPherson. With that item, we have a letter of the two Supervisors'
[4:08] date of February 23rd, 2017. On the regular agenda, we have item 51. We've listed that as
[4:17] additional materials, there's a corrected board memo, we did have a bit of a computer
[4:22] challenge on this item, the agenda back at materials were correct, however there was
[4:27] a web link for this item which was incorrect and some of the members of the public may have
[4:32] seen the old version of that memo via the link.
[4:36] The problem has been corrected and in an abundance of caution the correct version was also included
[4:42] as an attachment so people can have their attention drawn to it.
[4:45] So, with that, I think that's it for this morning.
[4:49] Okay.
[4:49] Thank you.
[4:50] Next, I'll go to members of the board.
[4:53] If there are items on the consent agenda that you'd like to comment on our pool,
[4:57] now would be the time.
[4:58] Good morning, Supervisor Coonerty.
[4:59] Good morning.
[5:00] Good morning, everybody.
[5:01] Thank you for coming.
[5:02] Three items I wanted to briefly talk about today on the consent agenda.
[5:06] The first is item number 13 with a status report and an update on homelessness prevention.
[5:12] I want to appreciate the work of our homelessness coordinator, who's both solved sort of short-term
[5:20] crises around the winter shelter as well as starting to put into place long-term efforts.
[5:25] Going forward, I think it's helpful for the board to actually get the actual numbers on
[5:31] the number of people housed or people who are prevented from becoming homeless by program
[5:36] So that we can see how each one of these programs is doing on a regular basis and evaluate
[5:44] where we're investing our dollars to prevent serious crisis in our community.
[5:49] On number 17, which is looking at solar installations, I'm potentially five sites around Santa
[5:57] Cruz County on Santa Cruz County property, I'm glad this is moving forward.
[6:01] It's been in progress for a while.
[6:03] Two years ago, this board set up a goal which would be to have 40% of our energy, meaning the county's institutions, power, come from renewables.
[6:16] And I think the installation of these solar facilities or solar opportunities can move a long way towards reaching that goal.
[6:25] And finally on item number 39, which is the roads, there obviously have been tremendous
[6:32] impacts.
[6:33] The roads that are designated today as a priority working with federal and state, the federal
[6:41] and state governments.
[6:42] One of the roads is not on a list of swan, which is severely impacted in having a real impact
[6:48] on our fire department's ability to have response times on the coast.
[6:55] And I'm hoping while this, it doesn't fit under this category, I'm hoping that we move it forward under any measures we can and make it a priority.
[7:03] So thank you very much.
[7:05] Thank you, good morning, Supervisor Friend.
[7:07] Good morning, Chair.
[7:08] I have nothing to pull just a couple of brief comments on item number 15, which is the District Attorney's Multidisciplinary Interview Center.
[7:15] this is a significant step forward to ensuring that victims of crime, especially younger victims
[7:21] of crime, have an opportunity in a safe location to have the issues handled for them right
[7:27] now.
[7:27] The way that it works is that multiple agencies end up coming in to different locations.
[7:32] Victim actually has to go to either multiple locations or deal with different types of people
[7:37] during a traumatic event.
[7:38] This brings us in line with a lot of other best practices, but the state into one safe, secure
[7:43] location is designed exactly for this and really is victim forward and I appreciate the district
[7:48] attorney taking the lead on that. On item 36, just honoring the president of the Land Trust,
[7:55] Terry Corwin, who's retiring has done a lot to ensure agricultural and open space protections and
[8:00] also ensuring that the community has access to both. She has a remarkable legacy that this county
[8:06] will forever be grateful for so I appreciate that the board is recognized around that and I appreciate
[8:10] Supervisor Leopold taking the lead on that.
[8:12] Item 39, again, regarding the roads and the letter to Cal Transistor Director, five Tim Govins.
[8:18] I held a pretty large community meeting last night regarding Valencia with public works and
[8:24] public safety agencies last night and I appreciate that these roads are listed on there and
[8:28] I appreciate the continued work I recognize that there has been a significant amount of work by county staff.
[8:34] Especially public works, not just to try and restore these roads, but
[8:37] to go through the state and federal process to expedite it.
[8:40] It is, as they know, and many of the community know,
[8:44] people are very concerned about access
[8:47] and about what the next stage would be
[8:49] if we're unable to restore some of these access components
[8:51] and this work through Cal Transit is the best way
[8:54] to expedite that process.
[8:55] I appreciate Public Works taking the lead on that.
[8:58] The last item is just item 42,
[9:00] regarding the C-cliff Village Street Skate Plan
[9:02] and State Park Improvement Project.
[9:05] This is long awaited by the community there
[9:07] We'll make a significant improvement to the access to the State Park and for
[9:11] Apptops in general, and so I appreciate that, even though we've got a lot of other emergency items going on that long-term projects are still being seen through by Public Works, I wanted to commend them for continuing to do the day-to-day operations as well.
[9:22] Thank you, Chair.
[9:22] Thank you. Good morning, Supervisor Caput.
[9:25] Thank you.
[9:27] Yeah, I'll just make a comment on item 38.
[9:31] I think it's good we're lowering the for the requirement for first time home buyers.
[9:40] Normally they would have to come up with 5% for an affordable house that's in the program.
[9:47] And we're lowering that to 3% for the down payment.
[9:51] That makes it a lot easier, it'll be instead of coming up with the down payment for lower
[9:56] lower income families from $26,000 down payment down to about $15,000.
[10:04] So it helps people especially with high rents today and everything the job market is, you
[10:11] know, and everything combined the price of homes in Santa Cruz County is actually running
[10:17] away from your lower middle class and middle class being able to buy a home in Santa
[10:27] I don't know how many homes are available if anybody has that figure that are actually available in the county for first time home buyers that can participate in this program.
[10:42] I'm not sure that we have that number available this morning, but we'll see what we could find in and get somebody to send your memo about that.
[10:52] Good morning, Supervisor McPherson.
[10:55] Thank you.
[10:55] I too would like to address item number 11 and 39.
[11:00] I think this is the third continuation or fourth, maybe,
[11:05] a continuation of our emergency natural disaster declaration.
[11:09] And it just seems to keep going on.
[11:12] Thank heavens we have a little sunset on today.
[11:14] But I think we're nearing the estimated $40 million mark.
[11:18] I don't know, I do know that we're going to have a discussion on budget items later today,
[11:25] but I don't know if we should have an update from the public works director.
[11:29] I think we have 130 disaster sites, $40 million.
[11:32] You had a community meeting.
[11:34] I know up in the summit area I did last night, also from the Los Cumbres at Lakeside School
[11:42] the last night was Santa Clara Supervisor Mike Wasserman about the situation.
[11:48] We're taking a little, we're trying to get some emergency funds for four major roads,
[11:53] as was mentioned, and get so we can move very quickly on those.
[11:58] I would like to mention too that Nelson Road was a rather innovative way to get a bridge
[12:06] It take two railroad flatbeds from railroad cars and put them across what was turned into
[12:13] a river and now they have access to their places for those 30 to 50 residences.
[12:19] I don't know if it's ingenious but it's a very, very clever way to do it and they have
[12:23] their access as they need it so that's great.
[12:28] I on item 25, project five, I think this is terrific that in line with the few foundation policies to increase our public safety efforts for those services of victims and to reduce the recidivism of survivors of violence as well, but that's very, very important and I appreciate that.
[12:50] I also, you scant over it, thank you for your discussion or your introduction on Bermanteau.
[13:00] Manoff, he was a fantastic person, did so much for so many people and was a leader in
[13:06] that field that he was in, and he loved it, and people loved him for what he did.
[13:11] And I can also say the same for the Terry Corwin, and thank you for getting the resolution
[13:15] for her. She, at the Land Trust of Santa Cruz County, has made that an example of how to
[13:24] go about getting a community behind preservation of our natural resources. She has been fantastic
[13:32] for 11 years as a leader of that agency. And we appreciate her efforts through the years
[13:37] very much too. Thank you. Thank you. I don't have any items to pull. I'll just comment on
[13:43] a couple of them on item 18, I know we're going to be returning on June 6th for this water
[13:49] tender because they're still working on it, but this is a great example of a community
[13:53] stepping up and raising $350,000 to purchase a water tender for the Loma Prieta Fire Department
[13:59] and it's all part of County Fire and I appreciate the work of mountain residents and the ongoing
[14:06] going relationship we have with Cal Fire and County Fire.
[14:11] On item number 37, I think it points to the difficulty, as always, in building affordable
[14:19] housing, when you have resources but you don't have a project, it creates a lot of problems
[14:25] and I want to remind the board that where we can build housing is part of housing developments
[14:30] that's always a good strategy because even as we see here, even with money, it takes
[14:36] It takes a lot to build a multi-family housing project.
[14:41] On item number 39, I'm really glad to see SoCal San Jose Road on this.
[14:48] There's a lot of roads in crisis in the first district.
[14:54] This is obviously a hugely significant road not only to district
[15:02] I know there's been some extraordinary work that's gone on by public works, geotext staff, and looking at creative ideas. And hopefully, CalTrients will recognize the prioritize these four roads so we can get them up and running as quickly as possible. On item number 43, I just want to recognize our parks department as well as our public works department for doing this property exchange to help with the heart of SoCal Parkway project.
[15:30] This is a, we've built a beautiful park, we're trying to make sure that it links up with
[15:35] all of SoCal to make it a more pedestrian friendly community.
[15:42] In addition to this work, we've recently met with the SoCal School District,
[15:48] who's going to make land available at the back of SoCal,
[15:51] a entry to complete this to the bridge over to Lyon Street Park,
[15:54] which will make basically all of SoCal easily to walk.
[15:58] So this is an exciting development for SoCal and I want to thank the staff for their work on it.
[16:03] With that, I'll look to see if there's members of the public who want to address us on items on the consent agenda.
[16:18] Good morning, Ms. Dineburner.
[16:20] Good morning, and thank you.
[16:23] And I want to thank you for all of your good work.
[16:26] These are very trying times, and I recognize that and I know you're nerd a lot of stress with all the storms, and I just want to thank you for all your good work.
[16:35] I do want to
[16:39] call into question item number 15 expenses and I looked into the documentation.
[16:47] I think this idea is very good in terms of making a multidisciplinary interview center
[16:55] for these people, these young people.
[16:58] But what I want to ask is if there isn't some place that the county already has, maybe even
[17:04] the school district, just we've got a huge, huge debt in front of our county with everything
[17:12] we have to repair.
[17:13] And I think we've got to start really looking at these outside contracts, $35,000 to hire
[17:20] a consultant to find a place and then another $30,000 a year to secure the place.
[17:29] And I just think, it's adding up and to that end, I also want to bring a similar concern regarding Bowman-Williams and
[17:42] the Seacliff Village streetscape, adding another $50,000 onto their $331,000 contract.
[17:54] that $50,000 is for them to manage the contractors and again, that's $50,000 that I think are staff that we already have could probably do that job, even though they're really taxed right now, but that's what we have these people on board to do and that's $50,000 that our county could have for other uses.
[18:20] And then I want to make also a comment about item 18 and the delay of the Loma period of fire department getting their piece of equipment that they raised money to buy and I was not able to contact Mr. Alex Lehman.
[18:44] And I'm really trying to take your suggestion to hired Chairman Leopold of contacting people.
[18:50] There's just so precious little time before, between the time the budget comes out and
[18:55] before I am here before you.
[18:58] But I just want to point out that that community raised the money to buy that piece of equipment that they needed.
[19:05] And there's money available in Prop 172 funds, $17 million a year.
[19:10] That needs to go to capital improvements for our county fire.
[19:14] Thank you.
[19:15] Thank you.
[19:19] Anyone else for the consent agenda?
[19:22] If not, I will bring it back to the board for a motion.
[19:25] Move approval.
[19:26] Second.
[19:27] Motion by community, seconded by McPherson.
[19:29] All in favor, signify by saying aye.
[19:31] Aye.
[19:32] Any opposed?
[19:33] Motion carries unanimously.
[19:35] Next, we will move on to oral communications.
[19:39] Can I get a raise, people to raise their hands is who wants to speak during all communications.
[19:46] I don't usually do this, we have a very full agenda today, a very long day, or at the board.
[19:51] So we're going to try to limit the oral communications to 30 minutes.
[19:57] It says that on our agenda, we'll try to get everybody in here.
[20:01] So if you could please come forward, I'd appreciate it.
[20:13] Good morning.
[20:13] Good morning.
[20:15] And thank you.
[20:17] I want to bring to the attention of the board a project that our neighborhood objects
[20:23] to.
[20:24] It's on track to being approved.
[20:26] The address is 26.11 a state's drive in Aptos.
[20:31] Supervisor Friend has been on some communications regarding this project.
[20:37] This is being approved, considered as a ministerial application, because it supposedly meets the guidelines of a single family residence.
[20:47] However, I assert that it is anything but ministerial because it's unprecedented in the county.
[20:54] The most recent iteration of this project is five bedrooms, seven and a half bathrooms, and 2,900 square feet.
[21:03] In a neighborhood that has nothing like that, and however, and so that in itself looks
[21:12] like a single family residence according to the Planning Department.
[21:14] However, the original application was for an 11 bedroom, six and a half bath house,
[21:22] with commercial style kitchen, key card entries, emergency exits.
[21:27] That was declined because it was clearly not single family residence.
[21:31] although that was the claim by the applicants.
[21:35] This progression, so taking the current iteration does it meet it, I guess, you know, apparently it does, but when you look at it as a whole,
[21:44] and the progression clearly reveals the pattern of its intent not to be a single family residence, but as some sort of commercial endeavor.
[21:53] Again, no other doing a search on MLS, no other residents with seven-and-a-half bathrooms
[22:01] came up and certainly none under 3,000 square feet.
[22:06] So this is truly an unprecedented structure based on the design of it and projected costs
[22:14] to construct something like this.
[22:16] It's only economically viable uses as a commercial use.
[22:22] It's going to, there's safety concerns.
[22:26] The neighborhood is a loop with a single ingress egress.
[22:30] It has narrow roads, undivided, no sidewalks, no street lights.
[22:38] And so increasing any traffic into that area is dangerous.
[22:42] I live on a blind curve on their, my kids live across the street from my grandparents that are here.
[22:49] And they're running across all the time, increased traffic is going to create a real problem.
[22:56] Being that we think that it is actually a commercial entity that something like that could decrease the value of the homes in that neighborhood significantly, depending on what it is that they put there, we suspect we know what it is that's going to go there based on what the applicants say.
[23:12] originally and that original plan.
[23:17] So I say that I would like this project to be considered as a discretionary permit
[23:24] if possible because of its unprecedented nature.
[23:27] Thank you.
[23:27] Tony, could you give her a name for the record?
[23:29] Tony Crane.
[23:31] Okay, thank you.
[23:37] Good morning, Mr. Arnold.
[23:39] Good morning, German supervisors.
[23:42] I believe that the California's shepherd's movement is going to have great consequences
[23:47] on this county and self-government to encourage people or for people to advocate California's
[23:54] separate state is freedom of speech. But when you have elected officials that are taken
[24:03] in oath to support the Constitution and conspire against the Constitution to destroy self-government
[24:09] really is treason. There have been numerous semi-secret meetings with Governor Brown
[24:14] with various people including Eric Holder who's the science advisor for the
[24:20] President of the United States. He wrote a book where he advocated Putty's
[24:24] sterlance and water and food. The other people joining in this alleged, well
[24:31] not alleged, the movement is there, but it's also alleged that the Mexican cartels
[24:36] are very interested in a separate state and read China. What has occurred in the
[24:43] The color revolutions throughout Europe and the Arab Spring have been at the forefront of these invasions or overthrows or coups has been open borders and immigration.
[24:56] I know our county has a program in which the taxpayers pay for people that are not citizens and not on a track, the paper track, to spend taxpayers money to integrate people from any place in the world.
[25:11] And right now the United States has 95 million people that are unemployed.
[25:17] Now Mexico has more billionaires than almost any other country in the world because they've
[25:21] destroyed the middle class and they have cheap labor.
[25:25] And I believe that your organization through was at the County Action Board and spending
[25:33] money there is actually a counter to the people that live who are your constituents.
[25:39] You're undercutting wages, you're stealing jobs, you're adding to the crime, you even release criminals in the community to threaten the seniors, you're not looking out for the Americans, you have a different program, which is one of World Government.
[25:56] We find again the same foundations, California forward, funded by huge tax exempt foundations throughout the state.
[26:05] And we also have the red Chinese interest on display at the courthouse steps.
[26:11] Udel A.C. has two honoring plaques for him.
[26:17] Udel A.C. went to Communist China.
[26:19] He met there with John Stewart's service and John Aft, who was American's Communist
[26:25] spy, who became part of the Chinese intelligence network.
[26:29] Also, we've had people here on the board who received red Chinese money thousands of
[26:34] dollars.
[26:34] I ask you to remove those plaques and get rid of that immigration program, it's counter to the interest of this county.
[26:42] Thank you. Good morning.
[26:45] Good morning. My name is Lauren Tobin, and I'm the chairperson, or the four person pro-tem of the Santa Cruz County civil grand jury.
[26:53] And on behalf of the grand jury, I'd like to thank you all for your proclamation,
[26:58] designation, designating February 2017 as civil grand jury awareness month.
[27:03] I've worked with this group for the last eight months, a group of intelligent, hardworking
[27:08] people who not only strive to shine a light on areas where our local city and county governments
[27:15] can do a better job, but also to acknowledge where changes have been made and where jobs
[27:20] have been well done.
[27:23] As you know, we don't have any judicial or enforcement power, but we wield our influence
[27:29] through our reports and we'll be issuing those reports over the next several months
[27:34] to bring to light and to demonstrate and help,
[27:44] so where county governments can do better
[27:51] in terms of ethics, transparency, and efficiency.
[27:54] And just lastly, I wanted to mention that as of last spring, the grand jury is now open
[28:00] to applications.
[28:01] And so if any of you are your staff, know of anyone in your districts who might be suited
[28:07] to this type of service to our community, we hope that you will encourage them to apply.
[28:12] And we thank you again for your support and recognition.
[28:15] Thank you for your service.
[28:16] Thank you.
[28:19] Good morning.
[28:20] Good morning, Chairman Leopold and Board, I'm Stony Brook and I'm here today for your Santa Cruz Veterans Memorial Building and the Board of Trustees as well as the United Veterans Council.
[28:36] On the 23rd of this month, as you're aware, we held a Veterans Visiting Summit at the Veterans Building.
[28:43] We took a head count, we had about 75 people in attendance, we went into small groups, came
[28:50] up with some wonderful ideas, had an opportunity for people to build relationships with one
[28:55] another, as well as work on some ideas of how to bring the building back to its former glory,
[29:03] to bring in the public, to be able to utilize that facility with art, theater, and music.
[29:11] and we felt all in all that was an extremely good event.
[29:17] What I wanted to also share with you is we've now installed a computer lab
[29:20] and an educational facility in the building for veterans to have access
[29:25] to be able to use computers and be able to hopefully transfer to Cabrillo.
[29:30] We've also installed a 60-inch TV courtesy of the Aptos Lions Club
[29:35] and furniture in the basement as a recreational facility
[29:39] and that was donated by Costco, a tremendous thing.
[29:43] I also wanted to let you know that our lunch and pantry project
[29:46] have continued since the first of the year.
[29:48] We're serving now about 60 people each Wednesday
[29:51] at the service day.
[29:54] It's working fine.
[29:55] We're staying within budget.
[29:57] Everybody is doing great.
[30:00] We've also working with the volunteer initiative program with the county. We're going to be developing a screening process for the people who provide services in the building to make sure that everybody's safe and they're appropriately trained for the jobs we're trying to offer up. We're going to be hosting a job fair in early April. That'll be four days. Three days are going to be services to help develop jobs, application skills, filling out resumes, being able to be interviewed.
[30:30] in the fourth day, we have 15 employers who are going to be coming into the building ready
[30:35] to hire people on the spot. Now, while it's going to be in the veterans building, the
[30:40] focus is on the general community, so everyone will be welcome to come and participate in
[30:44] this project. This will be in-sponsored by the Board of Trustees and the United Veterans
[30:48] Council. And last but not least, the weekend of Memorial Day, May 27th through 29th, we hope
[30:58] to have an open house with historical displays, and we're trying to work with the Museum of Art and History to help bring that building back to the way it used to look.
[31:08] It's a gorgeous place and it's been underutilized. That's our commitment to you and the community. Thank you very much.
[31:15] Thank you.
[31:20] Good morning.
[31:21] Good morning. My name is Becky Steinbruner. I'm a resident of Apptoss, and I want to talk with you this morning about something that I saw in the Santa Cruz Sentinel over the weekend.
[31:32] And that was that the lands, the privately owned lands that are supposedly in tax default
[31:40] are now going to be auctioned online.
[31:43] I happen to know somebody whose farm is on that auction block.
[31:48] And I think this is putting making the executioner's faceless to do it online.
[31:56] And I will also point out that in this person's case, it isn't taxes.
[32:00] It's leans from red tags that were supposed to have been expunged, but were not.
[32:07] This person did send in some money, and the check was cashed, but there's no record
[32:13] of it in the assessor's records, in the planning department records, where some of these
[32:19] leans are coming from, and the leans are being charged 21% interest per month.
[32:27] That's robbery.
[32:28] How can someone ever do that?
[32:33] And so I want to bring to you, and it fits right in well with what Mr. Crane has said here this morning that we really need to bring back the Citizens Building and Fire Appeals Board, where the citizens had, before your board disbanded it, an opportunity to raise appeals without paying $1,800,
[32:56] dollars and hiring in a very expensive lawyer to represent them, to fight this kind of thing.
[33:03] We have nothing now other than having to spend tremendous amounts of money to uphold our rights and have it some justice.
[33:13] So I'm asking you to please bring back the citizens board of building and fire appeals.
[33:20] The Santa Cruz, it is a state law that you have it.
[33:24] And currently, now when I looked on the website for the appeals, your board is the appeals board.
[33:32] And I really think that you could be using your time in a better way.
[33:36] And I think that the panel that used to be the appeals board who were building and
[33:42] professional people did a very good job and
[33:46] And then another appeal board like that could be brought back to the people for appeals at a low cost.
[33:52] Thank you.
[34:00] Good morning.
[34:02] I'm Toria Nelson-Weeks from La Selva Beach, and of course I recognize Mr. Friend.
[34:10] What I would like to propose here is that as a community county and so for us that we consider
[34:24] acknowledging all of the people and organizations that responded regarding the last storms and
[34:34] I understand I guess public works is going to have some kind of acknowledgement but I'm
[34:40] talking about the people who came for PG&E from Fresno, a lot of these people who responded
[34:47] here in all organizations, Davie Tree, the firefighters, the Cal Trans police, CHP,
[34:59] and I'm sure in many communities there were probably just individuals that saw something
[35:06] and that needed to be done, maybe got their tractor and pulled one of these large trucks out
[35:13] of the mind. So I'm thinking that as churches, other organizations and so forth, that maybe
[35:22] on the 4th of July, when we do have our barbecues and parades and so forth, that something
[35:30] should be done to acknowledge these people. I also think personal letters would be a wonderful
[35:38] I think it's very important and you'll have to forgive me as I'm very emotional
[35:45] regarding just being here today and listening to the other people.
[35:52] Thank you for your service.
[35:54] Thank us all.
[35:57] Thank everyone of us.
[36:00] Thank you so much.
[36:01] Thank you all.
[36:06] Good morning.
[36:08] Good morning.
[36:09] Thank you for your time today.
[36:10] My name is Mueller Geeson, and I'm one of the residents on the Estates driving out
[36:16] toss, and I'm speaking on behalf of the neighborhood there.
[36:20] I just like to say that thousands of people have made their decisions prior to the owners,
[36:25] the current owners of 2611, and made their decisions in the past based on the neighborhood
[36:30] and the financial decisions that we all did when we moved into that neighborhood.
[36:39] So, you know, we carried those properties through good times and in bad, a lot of the neighbors
[36:44] had been in there for a long periods of time and carried them through a lot of financial
[36:49] periods of time where that was very difficult myself included.
[36:54] You know, in particular for myself, I do have children that play in the street on blind
[36:59] And you know, the neighborhood does it like Tony said, only have one in grass and one e-grass.
[37:06] But as Tony had stated, this is definitely not consistent with the neighborhood that we have.
[37:14] This is definitely a commute, you know, in my opinion, a commercial development and based on the comments of the people that we've spoken to on the project.
[37:23] It stated in the general plan and it's a mandate that for future growth and the development
[37:29] is in a manner consistent with the goals and quality of life desired by the Santa Cruz County
[37:34] citizens.
[37:35] In this case, the family will benefit financially at the expense of the other 58 owners in
[37:40] the neighborhood.
[37:41] This is clearly not what was intended with the framers of the general plan because of this
[37:46] Unprecedented nature of this project and the potential financial repercussions,
[37:52] we respectfully request that you reconsider this application as discretionary permit.
[37:59] Thank you.
[38:00] Thank you.
[38:09] Good morning, since these LED lights were put in, feels worse than ever, and I want to
[38:16] You draw people's attention to an interview, Dr. Mercola Dia on the dangers of LED lighting
[38:26] with a photobiologist.
[38:31] In addition, we are exposed to a lot of microwave radiation from all these antennas,
[38:43] life, I et cetera, this young man was talking about the quality of life being very important.
[38:52] This is damaging our quality of life to be exposed to all these toxins.
[38:57] Here's a quote, forget who from my speech you've see out from the indigenous people.
[39:05] All things are connected like the blood which unites one family.
[39:09] Whatever befalls the earth, befalls the people of the earth.
[39:15] We did not weave the web of life.
[39:19] We are merely a strand in it.
[39:22] Whatever we do to the web, we do to ourselves.
[39:28] We need to respect and protect the web of life.
[39:34] And that's what I'd like to see this for the supervisors too.
[39:40] Unfortunately, not seeing that, when former supervisor Jan Buse received correspondence
[39:49] from Olga Stone about 10 years ago about the proliferation of radiation emitting cell
[39:56] towers in her neighborhood and all over now, she told of her brain cancer that she finally
[40:07] died of and the cancer that dogs got, and indeed what happened to Olga's stone is consistent
[40:18] with surveys around these radiation emitting cell towers that are now being put on utility
[40:25] poles for 5G, 4G technology is in my neighborhood, totally degraded the quality of life.
[40:33] Surveys around these towers show people experiencing fatigue headaches, memory loss, cardiovascular
[40:43] problems, as well as increased cancer.
[40:46] And she concluded her letter to Supervisor Jan Budes, do we want the health effects of
[40:56] cell towers to proliferate in our community?
[40:59] It feels like an invasion.
[41:03] Indeed, it is an invasion who are being assaulted by these frequencies.
[41:09] You can't remove them.
[41:12] The Board of Supervisors should be protecting our health, not corporate wealth.
[41:18] Thank you.
[41:22] Give a few more minutes for oral communications.
[41:26] Seeing no one, I'll bring it to the back to our regular agenda.
[41:31] Item number 48, which is considered recognition of Department of Public Works Transportation Division for their work on the county roads during the winter 2016-17 season as outline in the memorandum of Supervisor Coonerty.
[41:46] So as was noted, we've had a lot of different county workers and private sector workers and regular citizens out there working hard in these storms.
[41:55] It was a natural disaster, several natural disasters over the course of the last month.
[42:01] And I just want to take a moment to thank our public works,
[42:04] Rhodes Cruz, who have been out there working overtime trying to fix it up.
[42:09] Normally, we'd have them come in and we'd have a celebration.
[42:13] Well, some of them are here, but I know that many of them are out there working today as they have been every day for the past couple of weeks.
[42:21] So we had cookies delivered to the road crews around the county today, and I just know me and my colleagues just want to say thank you.
[42:37] Thank you, Chair.
[42:38] And it's been amazing how 24 hours a day the public works crew has been.
[42:46] We've been hearing from public works in the middle of the night when we've had issues that we've had to get out.
[42:51] Before Valencia, elementary had to be closed.
[42:53] I was receiving text messages from Ray in the middle of the evening.
[42:57] Making sure that the school was communicated with, making sure I was communicated with.
[43:01] We held a large community meeting last night and assistant director Steve Wiesner was there until almost a little after 9 o'clock.
[43:07] making sure everybody's questions are answered.
[43:10] This is going on every single day and it's been going on since December.
[43:14] And we've hit multiple storm sets.
[43:17] And during these times of sun doesn't mean the public works isn't doing anything.
[43:20] In fact, they are doing a lot to address the nearly 140 permanently damaged
[43:26] unincorporated roads in our county that have reached about $40 million in damage
[43:30] to put in perspectives about, you know, it's a significant undertaking, significant effort.
[43:36] And over the last couple of years this board has heard public works talk about all because
[43:42] the gas tax and other elements about how the roads crews actually have been cut funding
[43:46] and staffing over time.
[43:48] And I haven't heard a single complaint from any member of public works over the last two
[43:53] and a half, three months.
[43:55] In fact, all I hear is that a lot of them tell me they're excited to be able to get people
[43:59] to get back to their homes.
[44:00] And this is why they signed up for this job and that kind of, it was really admirable.
[44:05] It's just really admirable.
[44:06] It's a group of people, I've talked to Director Presley about this group of people that don't
[44:10] like praise.
[44:12] I just want to go out and do work and do good work, but we're hearing it all the time from
[44:16] our constituents about how much they appreciate the fact that within really, within no time
[44:22] for when something happens, they're out there assessing the engineers are there, they're removing
[44:25] the damage, they're making sure at least one lane is passable and some people get in and
[44:29] out of their homes.
[44:30] We really do appreciate what all of you have done and all the time commit that you're putting
[44:34] and recognizing we're still in some respects in the beginning stages of all that we have to do here in the county and the rebuild process, but we're confident in putting it in your hands and all the stuff that you guys would do. Thank you.
[44:51] There's the thanks can't be overstated. The public works department in particular that rebuild or try to rebuild what we can as quick.
[45:00] Please, we can. We haven't seen anything like this. I mean, people said this is worse, it's been worse on our infrastructure than the earthquake, or the storm of A2, or the flood of 55. It just, and it goes on and on and on. This is the worst that we've experienced yet. I think we might be hearing a little more about that. But I am not only public works, but the public safety personnel throughout the fire departments, CHP, the police department,
[45:29] Mrs. Sheriff's Office, everyone has just stepped up an extra notch and put in extra hours, believe me.
[45:37] And PG&E has done a phenomenal job, too, of trying to catch up with what in other AT&T and so forth as quickly as we can.
[45:46] It gets complicated when you have to deal with wires before the trees are filled and it just is a complicated situation that needs a lot of coordination.
[45:56] And that's not always easy to come by when I understand public works gets, it's been
[46:03] getting at least 75, at 85 calls an hour at some times.
[46:08] And so other agencies are getting like phone calls and to try to coordinate that all at
[46:14] the same time is not easy.
[46:17] I think we will look back and we'll see how we can approve on coordinating those activities.
[46:23] But for what we have and the effort, the damage has been placed upon us in Santa Cruz County and I understand it's probably about 10% of the total storm damage in the state is what's going on here when we're closing in on the $40 million damage estimates that we have now.
[46:42] So I just want to thank you, I think, that there's three levels that we want to get to
[46:49] first, general public safety, get people who are isolated because of road closures, get
[46:56] them to get back to the community and to get our major roadways going.
[47:03] I understand that Highway 152, that's a state highway, of course, but that was just open
[47:07] this morning, again, but it's unbelievable when you go out there and you see it when
[47:14] you see Bear Creek Road right after the bridge in Boulder Creek and you look down about,
[47:20] I don't know, at least 40 or 50 feet and it's just a cliff now and there's one lane.
[47:26] I have been to several community forums one time or another last night as I think I mentioned
[47:33] Before Lakeside School, last night in Santa Clara County, with Public Works Director John Presley,
[47:40] we coordinated a meeting with Santa Clara Supervisor Mike Wasserman to let the people,
[47:47] let them know where we are, how, this is going to take a long time to come back.
[47:51] And we have to let things dry out, the engineering process and so forth is going to be a long haul.
[47:58] But I really want to thank the general public too for their resiliency,
[48:02] They're patients. Some people have lost their patients a little, but the best story, the whole storm system has been when a couple of our neighbors just pulled out the chain saw some highway 17 and cleared the road in no time at all.
[48:19] That's not because Calcran couldn't do it. It's just they were there and they did it and they acted and everybody's helping everybody else as much as they can.
[48:27] And I want to thank the departments that I've mentioned, but for the general public to just maintain your cool, be patient.
[48:36] This is going to take a long time to recover.
[48:39] We're still waiting to see just how much the federal and state governments may be able to assist us.
[48:44] They will be an assistance to us, but it's going to take some time.
[48:50] And thank you for your patience and just keep them.
[48:53] Thank you.
[49:00] I want to thank Public Works also, District 4, we had our problems and we had one major
[49:12] project that they called the right people and got everybody there, granite rock, that
[49:18] was the big break and leakage going on by coward road off of Riverside Drive, Riverside
[49:25] road and also between Thompson. That could have been, you know, major flooding, mostly
[49:31] in the agricultural land. But if that broke in that area, it would have, you know, could
[49:39] have been a problem also in senior village area. I want to thank public works for proactive
[49:48] work with the bench excavation project of the Pauho River. We could have our experts come
[49:58] up, but I believe if we didn't do that work, we would have had some major damage in
[50:03] District 4. What I'm talking about is three years ago, removing 300,000 cubic yards of sediment
[50:11] that had built up on the banks of the Pajaro River.
[50:16] That was removed, that was 30,000 truckloads that was removed.
[50:21] They had to go through a huge amount of paperwork with the Army Corps of Engineers,
[50:28] the State of California, Fish and Game, Federal Wildlife Refuge.
[50:33] And we did have problems, but with all of that removed and the widening of the banks,
[50:45] I believe I have the figures right.
[50:48] It increased the flow of the Pauho River and also took pressure off the Corleedis Creek
[50:53] and the South-Supredis Creek and increased flow by about 3,000 to 4,000 gallons per second
[51:00] And in a storm that was water actually being able to get out of there.
[51:07] The water levels raised up to almost flood level in a certain area of the district for.
[51:14] And within a couple of feet of going over the banks.
[51:18] So with all that sediment being removed, I just want to thank you for all the work you did.
[51:23] and also Carlos Palacios and Susan Morello
[51:27] for focusing on South County about three years ago
[51:31] and making sure we were proactive.
[51:34] One other little story too.
[51:37] The Lake and community,
[51:40] one home was, did have water enter into the house.
[51:44] It's a care facility for people
[51:48] and they did have to be removed.
[51:50] That was a buildup of college lake
[51:53] and there's a stream back there, I call it a ditch really, but it's overflow from
[51:58] Pinto Lake and it runs into that area. So you have Cornelitis Creek, South
[52:02] Subway's Creek, the Pinto stream, all running into one culvert behind the
[52:09] lake and community. That culvert branch broke off in the middle of one of the
[52:16] storms and was right out the culvert, and we called public works.
[52:24] They came out right away.
[52:25] It was a very dangerous kind of a situation.
[52:29] They had to actually walk out on the culvert, which is about six foot wide, six foot in
[52:36] diameter, and reach out with a pole cutter and actually cut those branches up into small
[52:42] pieces so that it could actually flow through the culvert rather than jam it.
[52:48] College Lake, if that, if some of this work was not done, that area, the lake and community
[52:55] of about a hundred homes would have had major flooding.
[52:59] So anyway, I could talk on and on about heroic action that took place by fire department and
[53:07] the sheriff's police, city crews and everything coming to come together.
[53:14] So thank you very much and God bless you for all you're doing.
[53:19] Thank you.
[53:25] You know, when I think about our public works transportation division, the men
[53:31] and women who really help keep our road network strong and have placed
[53:37] such a critical role over the last six weeks in trying to keep our roads open. I think
[53:45] of the expression that never has so much been done by so few for so many. The road crew
[53:54] is probably half the size it was ten years ago. And last year when we went out to ask
[54:05] the public to support measure D. One of the things we wanted to see as part of that
[54:09] is to actually increase the size of our road crew to do the ongoing work and maintenance
[54:14] that are necessary. What we've seen in these storms is a really fierce commitment to making
[54:23] sure that people can get to their homes, they can get to their businesses, they can get to
[54:27] their schools. And that commitment has been from bottom up, from top down. There has
[54:35] hasn't been in the conversation with the Director John Presley or Assistant Director Steve
[54:40] Weasner in the last weeks where this wasn't their primary focus, whether helping ensure
[54:47] that the resources were there to support the road crew and all the contractors who were
[54:53] doing the work or going out and helping us identify funding or creative strategies.
[55:00] And to the road crew, it's been an extraordinary work.
[55:05] My office has worked with Don, Harmon, and Augie Waltrip for work up in the summit.
[55:13] You know, there are some roads that we have that you wonder how we ever let them go in,
[55:19] because they're in such precarious positions even in the best of times.
[55:23] And as we've seen our road system deteriorate in some ways because of this extraordinary amount
[55:30] of water that's been coming down, the efforts to clear slides, remove trees, find work
[55:40] around that the help people get to where they're going have been really extraordinary.
[55:44] I want to express my appreciation and the appreciation and the board and all the residents of the
[55:49] first district for the work that you guys do in the last couple of weeks, but you do all the time.
[55:54] And we'll work to make sure you have more folks to help you do that work in the future.
[55:58] So thank you for your work, and we really appreciate it.
[56:01] We do have a proclamation, maybe Supervisor Coonerty wants to present this proclamation.
[56:17] So here's a proclamation signed by every member of the Board of Supervisors thanking you.
[56:22] I don't know if this or the cookies are more valuable, but as you heard,
[56:29] We're so appreciative of your efforts, so we know it hasn't been easy, and we know there's a road to go,
[56:34] but thank you, thank you for your efforts.
[56:42] I want to say something, but I'd like to say that it's, we are a family.
[56:48] You get closer to the mic so we can hear you.
[56:50] We are a family, and there are very few of us, but, as you said, we are all dedicated
[56:56] to getting people home, getting roads open, and keeping everybody safe.
[57:01] This is for the people that are out there 12, 16 hours a day who don't complain,
[57:07] who are happy with pizza at the end of the day, go home and take a bath and come back
[57:12] the next day, so thank you very much.
[57:22] All right, but just keep it to roads, not waterways.
[57:25] I know, I'll make it a real good.
[57:26] A word of precaution, we're still in the winter.
[57:30] The crew has to be vigilant, and I think it was in the 1990s we had a big storm in March.
[57:38] And that was a very close to major flooding damage, so we're doing well, we're doing best we can, but we do have to keep vigilant until we get into the middle of the spring problem.
[57:54] Thank you.
[57:55] Thank you.
[57:59] And I'm not sure if the director wanted to say anything.
[58:04] I know you're going to be speaking during the budget study session.
[58:11] John Pressley, director of public works.
[58:13] I can honestly say I would call out in the middle of the night and there will be these folks
[58:17] who are out there working, so they're very remarkable.
[58:22] We are hoping to see some transportation funding come down from the state.
[58:26] We can rebuild the road crew over time and replace equipment.
[58:30] and I'll talk more about that later today at 1.30,
[58:33] but they are a remarkable group of people,
[58:37] and we should be very appreciative of the work they do.
[58:40] And thank you for honoring them today.
[58:42] It's really well, this is a great thing for them.
[58:46] Yeah, thank you for your leadership.
[58:48] Thank you.
[58:52] Now we're going to move on to item number 49,
[58:55] which is consider resolution approving
[58:57] the joint powers authority agreement,
[58:59] establishing the Monterey Bay Community Power Authority,
[59:02] A firm that the Monterey Bay Community Power Authority is exempt from the requirements of the California Environment
[59:08] Equality Act, approve the County of Santa Cruz as a founding member of the authority, approve ordinance and concept authorizing the implementation of a community choice aggregation program, and take related actions as outlined in the memorandum of the general services director, included as a resolution, the MPCP joint powers agreement and the ordinance.
[59:30] Good morning, Mr. Palacios.
[59:32] Good morning, Carlos Palacios, Assistant County Administrative Officer.
[59:36] We are very excited to be here today.
[59:40] Today is the culmination of over three years of effort to form this joint powers authority.
[59:46] We have held more than 26 public meetings throughout the tri-county region and
[59:50] heard over 100 hours of public testimony.
[59:54] I'm trying to bring 21 jurisdictions in three counties to agreement on a very complex
[1:00:00] This project involving technical, policy, and governance issues is no easy task, and yet we have almost done it. We're right at the finish line.
[1:00:11] Monterrey Bay Community Power has officially been born. The JPA actually exists with the approval of second readings in San Benito County, Hollister, Scott's Valley, and Capitola. A number of other jurisdictions have already approved the first reading of the ordinance.
[1:00:27] Throughout this process, our leader and champion has been supervisor Bruce McPherson and is aid Jenny Johnson.
[1:00:35] They have spent countless hours traveling to every jurisdiction in our tri-county region to listen and inform and advocate.
[1:00:43] Thank you for your leadership.
[1:00:45] The CAO's office, General Services, County Council and our consulting team have provided this staff report to this effort.
[1:00:52] And we should be very proud that Santa Cruz County is where this effort began.
[1:00:57] And Santa Cruz County has been the lead in bringing this initiative to culmination.
[1:01:03] I'd like to now introduce Carol Johnson, our administrative services manager in the general services department to give today's presentation.
[1:01:17] Excuse me, good morning, Chair Leopold, members of the board.
[1:01:21] We are here this morning to present some next steps in the formation of Monterey Bay Community Power.
[1:01:26] That includes the adoption of the resolution approving the joint powers authority agreement establishing Monterey Bay Community Power, the execution of the agreement and to affirm that Monterey Bay Community Power is exempt from the requirements of the California Environmental Quality Act, to approve and concept the ordinance authorizing the implementation of a community choice aggregation program.
[1:01:49] Direct staff to move forward and participate in discussions regarding the county's share of the Credit Guarantee,
[1:01:56] appoint two representatives of your governing body to serve as primary and alternate to the newly formed
[1:02:02] Monterey Bay Community Power Policy Board of Directors, direct the clerk of the board to place
[1:02:08] the second reading of the ordinance on the next available agenda for final adoption, consider providing
[1:02:14] in direction to the representatives of this governing board regarding policies proposed by local
[1:02:19] labor representatives, and request authority to attach the final executed exhibit B of
[1:02:26] the JPA agreement once all parties have adopted the ordinance.
[1:02:30] But first, I'd like to present the following slide which provides history, background, best
[1:02:35] practices, and recommendations of the Project Development Advisory Committee that have gone
[1:02:41] into the documents we are requesting your board's approval on today.
[1:02:45] At the end of the presentation, we are available for questions.
[1:02:49] We also have Sean Marshall here from Lean,
[1:02:52] Ginny Johnson, as well as David Carlson.
[1:02:58] This slide identifies all the partners that have gone into developing the Monterey Bay
[1:03:04] community power.
[1:03:05] They include the counties of Santa Cruz, San Benito, and Monterey in all 18 cities
[1:03:11] within the tri-county area.
[1:03:12] We also worked with three regional joint power authorities, including Monterrey United Air Resources District, the Salinas Valley Solid Waste Authority, Monterrey Regional Waste Management District, and one of our key partners with the Community Foundation of Santa Cruz County.
[1:03:32] Monterrey Bay Community Power Goals include, to reduce greenhouse gas emissions, provide electric power and other forms of energy to customers at competitive prices.
[1:03:42] in Monterey, Santa Cruz, and San Bonito to reduce energy consumption and stimulate the
[1:03:48] local economy by creating local jobs.
[1:03:53] The formation process include numerous meetings including three special study sessions for
[1:04:00] elected as well as executive staff between May and June.
[1:04:06] We also provided numerous board presentations and in December and January we held ad hoc meetings
[1:04:15] to discuss in-depth details about finance information options as well as governance.
[1:04:23] Some of the deadlines that we were able to meet included passing the Monterey Bay Community
[1:04:28] power resolution of intent by September of 2016. That was passed by 18 governing boards.
[1:04:36] As Carlos mentioned, we've asked councils and boards to take action to form the JPA
[1:04:40] by today. So four have actually done so and have the second reading. We have additional
[1:04:48] meetings at the City of Santa Cruz today, City of Delray Oaks, City of King, as well as
[1:04:55] the City of Watsonville are all having meetings today on this very topic.
[1:04:59] And our goal is to have phase two formation and begin launch in spring of 2018.
[1:05:14] Some of the key guiding principles that were developed by the PDAC included offering competitive
[1:05:19] rates at the same or less as what is PG&A is currently charging.
[1:05:25] And those electrical services will include no unbundled racks, coal or nuclear resources.
[1:05:31] They recommended supporting rapid investment in local renewable energy at generation, control
[1:05:38] and safeguard of customer revenues and pursuit of long-term power procurement, maintaining
[1:05:43] a firewall between assets and liabilities of the CCE agency and those of municipal general
[1:05:49] funds.
[1:05:50] They recommended implementing effective risk management practices to ensure transparency
[1:05:56] and accountability to the local community.
[1:05:58] We also want to offer complementary programs that serve the community in the interest, such
[1:06:04] as feeding tariff, net metering, energy efficiency, retrofits, demand response, community
[1:06:10] solar, electric vehicle battery targeting as well as battery storage.
[1:06:16] We hope to establish criteria for the use of surplus revenues that ensures geographic equity
[1:06:21] and adheres to economic justice principles.
[1:06:24] And another principle is to develop a long-term strategic goal of regional energy self-sufficiency
[1:06:31] by building out local, renewable general projects using local workers making prevailing
[1:06:37] wages.
[1:06:41] Additional best practices that came from the three years of the PDAX work included recommending
[1:06:47] a standalone joint powers agency for economics of scale and procurement, financing, and long-term
[1:06:55] operations, keeping local control of operational decisions and revenue streams, taking advantage
[1:07:01] of existing CCE expert consultants and back-end administrative services.
[1:07:06] There are numerous CECEs that have been formed.
[1:07:10] We've worked with Representative Des from Snowma Clean Power, Marin Clean Energy.
[1:07:14] They have provided in-depth expert advice that we have been able to take advantage of.
[1:07:20] We're recommending regional, equitable representation relative to population and electric, electric
[1:07:28] CD usage.
[1:07:30] And as you'll see from the forthcoming slide, we're recommending a manageable number
[1:07:33] of board members comprised of elected with alternates.
[1:07:37] We're also recommending a technical advisory committee of industry experts without conflict
[1:07:42] of interest and board representation that's structured similar to the Monterey Bay air
[1:07:47] resources district.
[1:07:48] So
[1:07:52] this slide shows the policy and operations board composition.
[1:07:57] Until such time as the JPA reaches more than 11 member agencies, the seats will be allocated on a one jurisdiction, one seat basis.
[1:08:06] Once the JPA reaches more than 11 members, the policy and operations board composition will shift to a regional allocation based on population size.
[1:08:17] There are five jurisdictions with populations of 50,000 and above that will have a permanent seat.
[1:08:24] Pending passage of the JPA resolution of ordinance, these would be Santa Cruz County,
[1:08:29] Monterey County, and the cities of Salinas, Santa Cruz, and Watsonville.
[1:08:34] We're also recommending that the County of San Bonito would have a permanent seat in recognition of its large geographical area.
[1:08:41] The remaining five shared rotating seats would be one for the Santa Cruz small cities, one shared seat for
[1:08:48] peninsula cities, one for coastal cities, one for Salinas Valley cities, and one for the
[1:08:53] San Bonito County small cities. The board also includes technical and advisory committees.
[1:09:00] We're recommending that the board structure will include a policy and operations board.
[1:09:05] The policy board will be composed of elected, who will have authority in the areas of strategic
[1:09:10] planning, adoption of the implementation plan, passage of the budget, customer rates,
[1:09:15] large capital projects, and financing as well as hiring of the CEO, Council, Treasurer,
[1:09:21] and Auditor.
[1:09:22] The operations board will be composed of senior executive staff who will focus on the routine
[1:09:28] day-to-day operations.
[1:09:31] As Carlos mentioned, four jurisdictions have approved the APA, adopted the resolution,
[1:09:36] and have the first and second readings of the ordinance based on this government structure
[1:09:42] that we have presented here.
[1:09:45] The next slide shows the policy and operations board composition that Monterey County is
[1:09:53] recommending.
[1:09:54] This design is the same as what you saw previously except Monterey County is recommending that
[1:10:01] there would be one additional extra vote, not a seat, but a vote for jurisdictions above
[1:10:07] 100,000 on the policy board, and those are identified as the county of Santa Cruz, the county of Monterey, and the county of Salinas.
[1:10:16] Excuse me, the city of Salinas.
[1:10:22] So these next few slides talk about financing, Monterey Bay community power, and the need to, what types of support will need.
[1:10:31] Those include funding for startup costs, which are those costs incurred prior to CCE service commencement,
[1:10:38] working capital requirements as well as reserved deposits.
[1:10:42] The size of the start-up capital will depend on the size of the overall program, depending on how many jurisdictions actually join.
[1:10:50] The planning process, the number of customers, a marketing budget, also as well as the availability of municipal staff to support the project.
[1:10:59] So if county staff can assist through that process, as opposed to billable time, also includes the complexity of the initial CCA program.
[1:11:08] and how many moving parts it actually has.
[1:11:12] This slide outlines some of the costs that we are expected to incur.
[1:11:18] This total shows $2.25 million, but it also depends on what the number of jurisdictions
[1:11:23] that actually join, so this dollar amount could fluctuate, could be higher, could be lower.
[1:11:28] Some of the things that we'll need to cover are expanding the technical study that's already
[1:11:34] than done. We'll need to have staffing, marketing, and communications will have extensive outreach
[1:11:41] to the community in regards to this process, and as well as security
[1:11:45] deposits, and a CCE bond that's required by the CPUC.
[1:11:51] Through the PDAP recommendations,
[1:11:54] they're recommending a hopefully a potential zero and low interest rate loan to be repaid
[1:12:01] through a program of revenues, a credit guarantee for the start-up one.
[1:12:06] The County of Santa Cruz issued an RFP for banking services.
[1:12:10] Those, the RFP responses are received as of February 1st, and we're currently reviewing
[1:12:17] those and determining next steps, but we hope to return to your board in April with a recommendation.
[1:12:27] Longer term credit needs include working capital, which would be linked to the size of initial
[1:12:31] customer enrollment, the initial JPA operating cost as well as the size and cost of energy contracts.
[1:12:38] So again, the types of credit include startup capital, working capital, a credit guarantee,
[1:12:44] and a letter of credit and bond financing for additional power contracts and project development.
[1:12:55] This slide is the summary of all the city council meetings,
[1:12:59] support of supervisors, meetings, as you can see, again, four have passed the resolution
[1:13:06] and had their second readings. So the GP agreement states that after three jurisdictions
[1:13:13] have passed, the GP will be formed. We now have four, so we are official based on this
[1:13:22] information.
[1:13:25] So, this last slide is just a summary. 285,000 customers now spend 355 million
[1:13:32] per year on electricity, 30% of which comes from renewable resources. Our analysis shows
[1:13:39] that we can double our use of renewable energy resources, reduce our greenhouse gas emissions
[1:13:44] from electricity, use by 70% and still pay the same or comparable to PG&E rates. After a
[1:13:53] In a few years of full operations, building organizational capacity and paying sort of debt,
[1:13:58] the study shows surplus revenues of 8 to 9 million.
[1:14:02] These are funds that can help build local renewable projects, create jobs, and lower rates.
[1:14:09] Existing CTEs use a JPA similar to the one before you today and have accounted for 833 megawatts
[1:14:16] of new California renewables as of January 2017 and 1 billion in construction to date.
[1:14:24] The performance to date of the CCEs under JPA's similar to ours presented here suggests
[1:14:30] that more than ample capacity exists to derive the desired benefits from Monterey Bay Community
[1:14:36] Power, local workforce and the business community as well, while protecting ratepayers by allowing
[1:14:42] and locally controlled decision-making to have full flexibility to meet dark market demands.
[1:14:49] And now we're available for questions.
[1:14:51] All righty. I'll look to my fellow board members of their questions.
[1:14:58] No, I guess the-
[1:15:00] I want to hear from the public first. Is there members of the public who would like to come forward?
[1:15:12] Good morning supervisors. I'm Glenn Schaller. I'm the political coordinator at the Monterey Bay Central Labor Council AFL CIO. We're the union of unions for Monterey and Santa Cruz counties. We have over 70 unions in about 35,000 working families. I'm also speaking today for the Monterey Santa Cruz County's Building and Construction Trades Council. Both labor coalition strongly support the formation of the Monterey Bay Community Power.
[1:15:36] joint powers authority. Now you've received correspondence from Andy Hartman,
[1:15:41] and he's president of the building trades and business manager and financial
[1:15:44] secretary of IVW Local 234. We are concerned about the creation of good-paying
[1:15:49] jobs, the development of local renewable energy, the formation of a robust
[1:15:54] community advisory committee, and the creation of the innovators and far-reaching
[1:15:59] business plan. We're glad that the joint powers authority can address these issues
[1:16:02] as it forms, and we hope that the Monterey Bay Community Powers, Monterey Bay Community
[1:16:07] Power Joint Powers Authority, looks carefully at the Alameda County-based Community Choice
[1:16:12] Aggregation Model, which is recently formed. It's the East Bay Community Energy, and although
[1:16:17] I understand that Sonoma and Marin have been successful, we're very excited about a new
[1:16:22] model, and I'm hoping that the Joint Powers Authority will address that. We're proud as
[1:16:26] the two labor coalitions in our region to support the formation of the Monterey Bay Community
[1:16:30] power. During powers authority, and we look forward to assisting in its best start possible.
[1:16:35] Thank you. Mr. Schaller, can you just say briefly what's the difference between the
[1:16:40] Alameda County? Yes. So the East Bay Community Energy, which is recently formed, covers Alameda
[1:16:46] County and many of the jurisdictions there. Now, I have decided that at the beginning,
[1:16:50] at the formation of the JPA, that they'll address some of the issues that have been discussed
[1:16:54] in the formation of this, but have not been built into the agreement that jurisdictions are, no, I'm signing on to.
[1:17:01] We had asked at the beginning of this process about a month ago for jurisdictions to put in amendments.
[1:17:07] And we stopped asking for that because there's a disagreement amongst attorneys, that's never happened before.
[1:17:12] No, about whether amendments slow up the process.
[1:17:14] So what Alameda did, what East Bay did, is make sure that it's built into the JPA from day one.
[1:17:19] And I think the business plan from there needs to be looked at, I think, bringing some folks down from there.
[1:17:23] to talk as we move into the process of having the first meeting in the JPA could be very helpful.
[1:17:30] The other part is that it's not a dissimilar situation in terms of having one large jurisdiction in that case, Oakland, and then smaller jurisdictions, where in our case, we have Salinas and our cities combined.
[1:17:43] But I think also the question of governance, we're not asking you all to look at it, I understand that Monterey County has a dog in this hunt in terms of trying to make sure that the city of Salinas is well represented, the county's well represented.
[1:17:53] I think that can still be worked out.
[1:17:56] And I'm hoping we have 21 jurisdictions represented on that very first day.
[1:18:00] Thank you.
[1:18:01] All right, thank you.
[1:18:04] Good morning.
[1:18:05] Good morning.
[1:18:06] Good morning, supervisors.
[1:18:08] Rick Lonzani, today I'm representing the Sierra Club Santa Cruz County Group with 3000 members.
[1:18:14] And we basically want to echo Glenn Schauer's comments.
[1:18:18] We've written a letter that says that we would like to see an advisory board and
[1:18:25] and that we'd also like to encourage that this Monday Bay Community Power focus on renewable energy that's sourced locally rather than just statewide.
[1:18:37] We think that would create more local jobs but besides that, it would make our community more energy resilient for the hard times that may be coming ahead.
[1:18:46] So, thank you very much. We support this measure and encourage you to do what it takes to set up a community advisory board. Thank you.
[1:18:55] Thank you.
[1:19:00] Good morning.
[1:19:02] Good morning. My name is Becky Steinberger and I just want to lend my support to this great project and hope that as the speakers before me have said that it is local jobs built in to the agreement and that there is a good level of representation, local representation.
[1:19:19] I also want to ask a question if the folks from deep water, from deep water diesel have
[1:19:26] been brought into this discussion because they are planning a very large solar array
[1:19:33] down in the, I understand the Pinotu Valley to supply power for the deep water diesel plant
[1:19:41] with an auxiliary plant there in a backup of the PG&E plant there.
[1:19:46] It's not owned by PG&N anymore, I guess, but in Moss Landing and that will fund, that will power their data center, so I did look at, and this goes back a bit since an item on the consensus agenda, but the Monterey Bay Regents Solar Collaborative Procurement Initiative that this county is looking at six different sites, so I just want to make sure that that site that's already in the works and has a lot of money behind it is that they're at the table.
[1:20:16] Thank you.
[1:20:18] Thank you.
[1:20:19] Are there other members of the public?
[1:20:23] Well, seeing none, I'll bring it back.
[1:20:26] Maybe someone could answer the questions about local job creation and local energy generation and how that's going to be addressed as part of this new JPA.
[1:20:38] Those will be addressed in the implementation plan primarily, which is one of the first tasks of the policy board of this new JPA.
[1:20:45] Okay, and so that doesn't come back to this board that will go to that new board.
[1:20:54] That's correct, and that is why one of our recommendations was for you to consider whether you want to provide any direction regarding those issues to the representative from this board on that policy board.
[1:21:07] Okay,
[1:21:13] other questions?
[1:21:15] No, I just would like to say, I do appreciate when we first started talking about this four
[1:21:21] years ago in my office, we were looking at Santa Cruz County only and much of the dismay
[1:21:29] of those who wanted to get this done quickly, we said, let's see if the other two other
[1:21:34] counties would be interested, which would be probably the first tri-county community
[1:21:45] This is the benefit from this project can't be overstated, especially in the environmental sense of doubling our dependence on renewables.
[1:21:56] We can reach the goal that is set by the state for us for greenhouse gas emissions by probably 2020 or 21 for those goals that are set and are met by 2030.
[1:22:10] That's just something I know that the community of this county and the tri-count area will be very excited about.
[1:22:18] But keeping it at probably the same cost and getting to that double, doubling our dependence on renewable energy sources, local governance,
[1:22:30] and keeping capturing the revenues that come in for us to do more in the future for maybe low income residents.
[1:22:40] I know this is to be decided by the JPA itself or for school districts or whatever the case may be.
[1:22:47] The opportunities are just really tremendous for us to look forward to once this has been formally established.
[1:22:56] And the creation of jobs is going to be very important as well.
[1:23:01] This is an important element of all of this, but I think this is something that this state hasn't seen before, and it's going to be a tremendous asset for many, many years for the people of this county and the tri-county area.
[1:23:15] Thank you.
[1:23:18] Thank you.
[1:23:19] First, I want to take a moment and just recognize Mr. President Fearson and his staff,
[1:23:24] Danny Johnson, and the county staff who has worked heroically to take this move this
[1:23:28] project forward.
[1:23:30] We're watching at the federal level us go in the wrong direction in terms of climate change
[1:23:35] and environmental goals, and the fact that this region is going to be able to move and not only counteract
[1:23:42] counteract some of that negative actions, but actually move forward in a way that makes us more sustainable,
[1:23:50] creates more local jobs and proves our local economy, all that money that's being shipped out of this county,
[1:23:55] out of these counties every year, now states here it can be invested locally.
[1:24:00] Thank you for your vision and thank you for your hard work, I know it hasn't been easy,
[1:24:04] but this is a transformational project in the history of this region.
[1:24:08] And I'm, it's a big day, and you all should be very proud of your work.
[1:24:16] And I'm prepared to move the recommended action, the recommended actions.
[1:24:22] And for, in terms of appointing our members to the JPA, I would recommend that we appoint
[1:24:30] Sue Reiser McPherson as a primary member, and I'll nominate myself as the alternate.
[1:24:35] I also, in recognition of some of the members that spoke, the community members that spoke,
[1:24:41] the additional direction that I would offer if there's, if there's approved by the board
[1:24:47] would be that the board directs our appointees to the JPA to support the development
[1:24:51] of a business plan within two years that includes a road map for the development,
[1:24:57] procurement and integration of local renewable energy resources with a focus on local job
[1:25:02] of creation, transparency, and accountability.
[1:25:05] The business plan should be developed in partnership with the community, and
[1:25:09] should be a public document available for review.
[1:25:12] I'll second the supervisor friend.
[1:25:16] Thank you, and thank you for that additional direction.
[1:25:19] Again, supervisor McPherson, thank you for your leadership role on this, Ms. Johnson as well.
[1:25:24] This is, in many respects, is a historic moment as far as this, not just for
[1:25:29] this county, but I think for environmental protection for the multiple counties.
[1:25:32] as we move forward. It's been important to me the entire time that we have a focus on local
[1:25:38] renewable energy and a focus on local job creation. I think that those are elements that need
[1:25:43] to be brought into this process. And I think that it's important that it will be addressed at the
[1:25:49] next stage. But I appreciate that those elements were brought forward by the community. And I think
[1:25:53] that the different people will take different elements from this. Some people will focus on rights,
[1:25:58] Some will focus on the renewables, but I think everybody can get behind the fact that when you're creating good local jobs and you're having local renewable energy, I think everybody can agree that those are important elements and some looking forward to this moving forward. It's interesting to see something come from such a significant element come born from just an idea that was presented the board a few years ago and to watch a come through the entire process. So it's an exciting step forward for many. So thank you. Supervisor Capit.
[1:26:25] Supervisor Capit.
[1:26:27] Just a second motion, so I agree.
[1:26:31] Well, let me just say that I appreciate all the hard work that has gone into the creation
[1:26:37] of Monterey Bay community power.
[1:26:41] We have an opportunity here to have sort of a multiple, a double or triple bottom line,
[1:26:48] which is reducing our greenhouse gas emissions.
[1:26:53] The electricity generation is second only to transportation,
[1:26:57] but it's a huge part.
[1:26:58] And when we looked at our climate action strategy,
[1:27:02] reducing our emissions from our electricity generation
[1:27:05] was a big way in which we could meet our goals.
[1:27:10] This effort is the single biggest way
[1:27:14] that we could reduce our greenhouse gas emissions.
[1:27:17] So, that's fantastic.
[1:27:19] The local jobs and economic development aspect of it, the fact that there will be resources
[1:27:27] and a drive to build local energy generation that's renewable, will mean that people here
[1:27:36] in Santa Cruz or in the tri-county area have the possibility of being involved on the cutting
[1:27:41] edge of new technology and development of new energy resources.
[1:27:47] Lastly, the idea of giving the local community control over the power company is something
[1:27:55] that we hear pretty regularly when people have problems with PG&E, and the idea that
[1:28:02] it will be local government that will have the voice in the direction of our energy choices
[1:28:09] in the future. It's hugely important. I appreciate the addition of this direction about
[1:28:21] a business plan. I think it's the right move. We previously directed our appointees to
[1:28:27] also talk with the JPA about a project labor agreement as these new jobs are created.
[1:28:33] And I think it's an important way to ensure that what we local government help sponsor actually benefits the local community in lots of different ways.
[1:28:43] That's what local government does. It really looks about our environment, our economy, and the people who live here.
[1:28:50] So I'm really excited about this step today, and I'm going to support the motion.
[1:28:55] There's been a motion made by Supervisor Coonerty, seconded by a Supervisor
[1:28:59] Capit, all in favor signify by saying aye.
[1:29:03] All right.
[1:29:03] And he opposed motion carries unanimously.
[1:29:06] We're
[1:29:11] going to do one more item before break, which is item 50, considered the appointment
[1:29:15] of Stephen Horlock to the oversight board of the Scotts Valley, redevelopment successor agency.
[1:29:21] Move approval.
[1:29:23] Second.
[1:29:24] Motion by Coonerty, seconded by Mike Fiercen, anyone from the public?
[1:29:28] All in favor signify by saying aye.
[1:29:31] All right.
[1:29:32] Any opposed?
[1:29:33] Motion carries unanimously.
[1:29:34] With that, we were going to take a 15 minute break.
[1:29:37] And I will mind the board members that we have some birthday celebrations.
[1:31:25] Starting in 1996 with the Compassionate Use Act, then moving forward to the Medical Cannabis Regulatory and Safety Act of 2015, and then most recently last year, the Adult Use of Marijuana Act of 2016, which for the first time legalize the recreational use of cannabis products. Santa Cruz County has been keeping pace with the changes in state legislation and has enacted a number of different ordinances. And those ordinances address each of the different types of activities involved in the case.
[1:31:55] cannabis industry.
[1:31:56] At this point, it's probably best to take a look at how we address the cannabis industry.
[1:32:02] We kind of look at it in a supply chain order, so we look at cultivation, we look at manufacturing, and then we look at the retail sales or the dispensaries.
[1:32:11] On the cultivation end, the board has been considering for the past year back in June, August and November of 2016, a proposed cultivation ordinance that would regulate the commercial cultivation of medical care.
[1:32:25] cannabis, and your board has directed staff to prepare an environmental impact report
[1:32:30] that took a look at the proposed cannabis cultivation licensing program.
[1:32:35] Staff is currently working with the consultant firm of AMEC Foster Wheeler to prepare the
[1:32:40] environmental impact report, and at this time I will turn this over to Pia Levine, who will
[1:32:46] talk about the EIR.
[1:32:47] Thank you.
[1:32:47] Good morning, everybody.
[1:32:49] So the EIR on cannabis regulation is underway.
[1:32:52] Currently, the consultant team is working to analyze information, continue collecting
[1:32:56] information, and they've been performing initial field work that will inform their work.
[1:33:03] The notice of preparation for the EIR was released February 13th.
[1:33:08] That began a 30-day period for receiving comments on the scope and the content of the document,
[1:33:13] and that period ends March 15th.
[1:33:16] Last evening, we had a scoping meeting at the Simkin Swim Center.
[1:33:20] It was very well attended. There were 60-plus people there. We received comments on the zoning
[1:33:26] in which cultivation will be allowed, particularly TPA and A, when it is near residential zoning,
[1:33:32] comments on minimum parcel size, comments on where manufacturing should be allowed, and there
[1:33:38] was interest in characteristics of the alternatives that the EIR should analyze.
[1:33:44] It's unusual to have a detailed idea of project alternatives this early in an EIR process.
[1:33:49] The alternatives usually come out of the analysis and they're contemplated as ways of mitigating
[1:33:56] any impacts that are identified.
[1:33:58] In this case, we have some information about alternatives that the EIR will look at,
[1:34:03] and the goal of that is to give your board information about the right range of situations
[1:34:09] so that you can do your thinking ultimately when you look at the project.
[1:34:13] But the EIR will analyze the proposed project, which is the proposed replacement ordinance 7.128,
[1:34:20] and also a more permissive version of that project.
[1:34:24] And also, a typically, the EIR will look at both of those in an equal level of detail.
[1:34:31] The EIR will look at some alternatives to those two projects, including a more permissive alternative
[1:34:37] that will allow cultivation in yet more situations and a more restrictive alternative that will
[1:34:45] look at allowing cultivation in many fewer locations.
[1:34:49] The alternatives are analyzed in less detail than the two projects, and according to
[1:34:54] SQL, we also will be looking at no project alternative.
[1:34:58] Lastly, the EIR is expected to, a draft EIR is expected to be published by June 1.
[1:35:04] That will lead to a 45-day comment period on the draft.
[1:35:09] We are thinking it would be a good idea to have a study session with your board during
[1:35:14] that 45-day period to allow a look at the draft altogether.
[1:35:20] And a final is expected out in mid-September.
[1:35:25] Public hearings would follow that, planning commission, we believe could look at the document
[1:35:30] in October and the project, and your board would be seeing that in November of this year.
[1:35:38] That concludes the status report. I'm available for questions, and thank you very much.
[1:35:43] Anything else, Mr. Peterson?
[1:35:45] Not on the EAR.
[1:35:47] Any questions, particularly about the EAR, then we'll continue on.
[1:35:52] Okay, very good. Moving on, still with the cultivation theme,
[1:35:56] The county held a 90-day registration process for people who wanted to apply for a commercial cultivation license.
[1:36:05] That 90-day process ended on November 6th of 2016, over 950 applicants opened an online account.
[1:36:13] 760 people actually finished the process, submitted all the required documentation, and paid the registration fee.
[1:36:21] Of those 760, 489 of those individuals registered anonymously, while 271 did provide their
[1:36:30] name and their address and the characteristics of what they were proposing.
[1:36:34] Those non-anonymous registrants do have a benefit in that they are eligible to receive
[1:36:41] a pre-licensing inspection of the cultivation site.
[1:36:44] These inspections are completely voluntary.
[1:36:47] They are considered to be a benefit to the applicant.
[1:36:49] My team and I would go out to their site, would review the characteristics of this site and compare them against the requirements in the proposed ordinance code.
[1:36:59] And would come up with a list of any concerns that could possibly interfere with the applicant finally receiving their license.
[1:37:06] And we would also go over options of how the applicant could come into compliance prior to the final licensing process.
[1:37:12] The final benefit would be that the people who go through the pre-licensing inspection process would also receive priority when it comes times to the final issuance of a license because we've already done so much of the legwork on those parcels.
[1:37:29] That leaves us to cultivation for personal use. Currently our ordinance code chapter 7.126 allows individuals who are qualified patients to cultivate up to 100 square feet of cannabis
[1:37:44] this for personal medical use.
[1:37:46] Staff has not seen any issues with how this is performing and does not recommend any changes to the cultivation on the medical side.
[1:37:55] The adult use of marijuana act, which was passed in November of last year,
[1:37:59] changed the rules and now allows people to grow people over the age of 21 to cultivate up to six plans for personal use non medical.
[1:38:09] So this is a change and it's not currently addressed in any of our ordinances.
[1:38:13] After working with local stakeholder groups, we recommend that if agreeable to the board, staff work with county council and we would come back to you with a proposed ordinance on personal cultivation for non-medical use, that would include the following provisions.
[1:38:28] Number one would be that only one cultivation site is allowed per parcel, so you couldn't have a number of adults on a single parcel each growing their own six plants.
[1:38:37] No more than six living plants may be cultivated indoors inside a residential structure, or within an
[1:38:46] Ancillary building to that residential structure.
[1:38:50] The residents must be occupied by a person over the age of 21.
[1:38:54] If it's a permanent structure that's being used, it has to be, it has to have all the necessary required permits.
[1:39:01] All buildings where cannabis is cultivated or stored would have to be secured against an authorized entry,
[1:39:06] protected against children or visitors.
[1:39:09] If the occupant of the residence is not the owner, then the occupant would be required to
[1:39:13] get written consent from the owner for cultivation or processing of cannabis products.
[1:39:19] There would be no flammable products allowed for the cultivation or extraction of cannabis.
[1:39:25] And then finally cannabis plants must not be visible from the public right of way or from
[1:39:29] adjacent structures.
[1:39:31] So, what we propose is that staff would return to the board with a draft ordinance for your provision or for your consideration, and we could return before budget hearings with that.
[1:39:44] I have a question, so this is the end of this section.
[1:39:48] Yeah, if you want to ask questions about this.
[1:39:50] Sure. So, two questions. One about the commercial cultivation piece.
[1:39:54] If we have some of our current registrants are not paying taxes, do we plan on reopening
[1:40:01] the registration process in order to allow potentially new growers to pay, who may be willing
[1:40:08] to pay taxes?
[1:40:09] Well, Ashley, this is a good point I was going to discuss this under the Canada's business
[1:40:14] tax section, but you are absolutely correct.
[1:40:17] We've only had 39 new businesses that have registered to pay taxes.
[1:40:21] their cannabis business tax since November. Obviously, if we have 760 applicants for commercial
[1:40:28] cultivation, we should have more. Now, one of the issues is that is our timing. Measure
[1:40:34] e past in November, we missed the outdoor harvest and sales for outdoor grows. That took place
[1:40:43] since September, October. So, what we should be seeing now are periodic spikes in revenues from
[1:40:49] the cannabis business tax as the indoor grows are cultivated and those are typically on
[1:40:53] a three month cycle.
[1:40:55] So what I'm hoping will happen is that we will see a spike within the next few weeks where
[1:40:59] we start seeing the first harvest of those indoor grows.
[1:41:03] However, because we have seen such a low application rate or excuse me, submittal rate for paying
[1:41:11] their cannabis business tax is what we would like to do is send out a letter to everybody
[1:41:17] who has requested a commercial cultivation license telling them that they have to register
[1:41:23] with the auditor by June 30th of this year for the cannabis business tax payment or they
[1:41:31] would be considered disqualified from moving forward in the licensing process.
[1:41:35] I think that a lot of folks have either under the impression that they don't have to register
[1:41:41] until it gets up to a dollar amount that seems reasonable or they simply haven't had any
[1:41:46] revenues yet because they're doing outdoor grows.
[1:41:49] This would encourage people to register for paying their taxes and would make sure that
[1:41:54] the cannabis community understands that paying your taxes is a prerequisite to having a license.
[1:42:00] But at this time, we are not considering opening up a phase two registration application process.
[1:42:06] Quite bluntly with 760 applicants at this point, we're going to be pretty busy for the remainder of this year just going through all of those and doing the site inspections.
[1:42:16] I would propose that I come back before the Board in late summer, early fall, and give you an update on how we're doing on that.
[1:42:24] And then my second question is around the personal grows. Actually, it's two questions. One question is by eliminating it to indoor grows.
[1:42:35] But what are we looking at in terms of making it easy for people to be in compliance
[1:42:42] with greenhouses or sort of hoop houses in different ways that are not costly to be able
[1:42:51] to meet this requirement?
[1:42:54] And that's a very serious consideration that we had given.
[1:42:59] And that's why the language was crafted in such a way that we said ancillary building,
[1:43:03] not a structure. The definition of a structure means it's a permanent, non-movable building.
[1:43:08] However, an ancillary building would include something that could be movable, that could be temporary,
[1:43:14] and would allow something less than a full-blown permitted structure on a foundation.
[1:43:19] Okay. And the second part is sort of why do we want to get into the business of regulating personal for us?
[1:43:27] Well, the biggest reason is simply neighborhood compatibility.
[1:43:30] One of the biggest complaints that I've experienced, both in Sutter County and
[1:43:35] Ube County and then down here, is the fact that outdoor grows, quite bluntly, they smell.
[1:43:41] And if you grow them too close to an adjacent property, it really does affect their neighbors.
[1:43:47] That's why indoor grows that can be secured.
[1:43:50] And also, the prevent the smell and the visual impact on their neighbors,
[1:43:55] It seems to be a very good idea, and hopefully by being not terribly restrictive
[1:44:01] and allowing the use of ancillary buildings should keep it from being too monetarily
[1:44:08] expensive for people to comply.
[1:44:11] And this doesn't impact people who are growing from medicinal purposes.
[1:44:16] Not at all.
[1:44:17] That continues to be covered under the existing orders.
[1:44:20] Okay.
[1:44:20] Thank you.
[1:44:21] I had a question related to that.
[1:44:23] the question of indoor outdoor. You talked at the end about not having it visible from a public
[1:44:29] right away, but if it's indoors, I mean, I mean, I'm not sure we need to have an indoor
[1:44:38] only restriction. I would like this to see if, you know, we allow people currently to
[1:44:43] go up to 100 square feet if they have a card to grow indoor or outdoor. But if we're only
[1:44:52] if you're suggesting that we only limit up personal grows to indoor locations.
[1:45:00] And we have this list of things they have to get through. The idea that somehow it's going to be nom observable by anybody seems a little much.
[1:45:15] I think there's six plans that it doesn't create a visual blight or even an extraordinary smell for people who want to grow outdoors.
[1:45:27] And so, I hope when we talk about this, that we can talk about whether let people
[1:45:33] grow indoor or outdoor, but it seems extraordinary to say you can only grow indoor, and it still
[1:45:38] has to be non observable by anybody driving by because or by a neighbor or anything,
[1:45:43] because you know, then you're talking about a windowless room, and that may or may not
[1:45:50] be something that people want to do, and it seems like an extraordinary request.
[1:45:55] If I could just add to Dan's response, again, the idea here is not indoor meaning like
[1:46:02] in a building.
[1:46:03] It would include any kind of enclosure that would just make it not be visible to the
[1:46:07] people around it and to be able to secure it from an authorized entry.
[1:46:13] So even something like a garden enclosure would be sufficient as long as the sides again
[1:46:21] were not visible.
[1:46:23] So the idea is not that it would be in a building or in your garage or in your home.
[1:46:27] It would be in some kind of a greenhouse structure or a hoophouse structure or some kind
[1:46:32] of, you know, a garden enclosure that would allow it to be somewhat secured.
[1:46:37] What we're trying to do is avoid a million telephone calls from people who are concerned
[1:46:42] about their neighbors growing plants and their yards.
[1:46:45] So we just want to try to suggest that we provide these enclosures as a means of minimizing
[1:46:52] I think some of that?
[1:46:53] Yeah, it just, it seems, you know, there's a lot of things that people do in their
[1:46:57] backyards.
[1:47:00] And some of the things, some of the things aren't very pretty, right?
[1:47:04] I mean, I mean, you know, if we looked at people's backyards, we would see, you know,
[1:47:10] rusted structures.
[1:47:11] We would see shacks that have been broken down.
[1:47:15] It's visual blight, but it's their backyard.
[1:47:17] And so the idea that somehow we're going to try to prevent someone from seeing a plan
[1:47:23] just, it seems like we're drawing an unnecessary line.
[1:47:28] So certainly that's your board's ultimate decision.
[1:47:32] I appreciate your perspective.
[1:47:33] If there are any more questions about personal cultivation, Supervisor Caffer?
[1:47:39] Well, if you looked at my back here, I just see a lot of broken toys.
[1:47:44] So anyway.
[1:47:46] We nat up.
[1:47:51] If maybe I'm one of the few that don't get it, there seems to be, if you can define anonymous
[1:48:02] and nonanonymous applications, because I'm not sure there's a lot of anonymous applications
[1:48:13] compared to the other way.
[1:48:15] The anonymous applicants, all they had to provide, was a working email address,
[1:48:20] which is how we contact them, and how we identify them.
[1:48:23] They did not provide their name or their eye address.
[1:48:26] Mostly due to concerns about security, they didn't want any chance of their
[1:48:31] cultivation site being published, you know, the address being published, so that
[1:48:35] people could pay them a visit in the night and borrow their plants.
[1:48:38] The people who filed this non-anonymous, obviously, they did provide
[1:48:42] their name, their address, their phone number, that means of contacting, and provide a lot
[1:48:47] of other data that is very useful for us in terms of trying to anticipate how many indoor
[1:48:53] grows, how many outdoor grows, what region are they growing in, are they growing up in the hills,
[1:48:58] are they growing down in the valley area, what water source are they going to use. And those are
[1:49:02] things that are of great interest to us. And really, we try to incentivize people to register
[1:49:11] as a non-anonymous applicant by virtue of the pre-licensing inspections, which we think will benefit both the county and the individual applicants.
[1:49:22] And then with, eventually, anonymous would have, they would have to, if they went through the whole process and they were granted, let's say, a permit or whatever, they would then become non-anonymous.
[1:49:39] That is correct. Once the EIR is completed and the board has adopted the final version of the ordinance we would be sending out an email telling the anonymous applicants.
[1:49:49] Now you have to decide if you want to proceed with the process. You will have to become a non-anonymous applicant at this point.
[1:49:56] You will have to provide a name and an address which is necessary for us to go out and do the site inspections and do all of the background checks.
[1:50:04] So yes, at some point before a license is issued, they have to make that transition.
[1:50:09] Okay, and I guess the last thing I'll ask, if you noticed, since the election in November,
[1:50:18] we have, you know, recreational use is going to be okay.
[1:50:23] And then all of a sudden, that changes everything from compassion to money.
[1:50:28] So money is money now the driving force rather than compassion for all these
[1:50:35] grows. That's obviously money, right? I think it depends on the grower. I would
[1:50:41] have to say during my five months here now in Santa Cruz County I've had the
[1:50:46] honor of meeting a number of the cultivators and I have been very impressed by the
[1:50:53] fact that many many of them are not in this for the money that they truly do have a
[1:50:57] desire to provide a quality medical product. Obviously, there are going to be business
[1:51:03] people that are going to be cultivating for profit. Absolutely nothing wrong with that,
[1:51:09] but I do not see that the Adult ESA marijuana act is going to impact natively those growers
[1:51:16] that are truly doing it for a medicinal purpose.
[1:51:20] Thank you.
[1:51:22] Why don't you continue, Mr. Peterson, with your presentation.
[1:51:25] So, moving away from the cultivation cycle, now move to the next step, which is the manufacturing.
[1:51:31] Currently, our ordinance code does not address the manufacturing of cannabis products.
[1:51:37] And after consultation with county council, staff believes that the board may wish to consider adopting a new ordinance that does regulate the manufacturing of cannabis products.
[1:51:49] A very, very preliminary draft was provided for the board to generate discussion and to
[1:51:56] promote input.
[1:51:59] As currently envisioned, the ordinance would require licensing for manufacturers of cannabis products,
[1:52:05] and would restrict manufacturing activities into appropriate zoning districts.
[1:52:11] If you look at manufacturing, one can broadly break it into two categories,
[1:52:15] extraction, and then everything else, the infusion and actual preparation of products intended for consumption or in some form of a cream or anointment.
[1:52:26] Now, the extraction can be further broken down into two subcategories, and we call them volatile and non-volatile, although I think will probably change those terms.
[1:52:35] But quite generally speaking, the extraction activities that use volatile solvents, such as butane, hexane, propane,
[1:52:45] CO2 carbon dioxide that's raised to pressures beyond 5,000 psi, we would categorize in a higher
[1:52:53] risk category that would be restricted to a manufacturing zone, an M1, an M2, or an M3.
[1:52:59] And by the way, the chart that was in the draft ordinance left off M1, so M1 should be
[1:53:03] allowed on there.
[1:53:05] Extraction activities that are using non-volatile solvents, and that includes carbon dioxide with
[1:53:10] pressures less than 5,000 psi would be allowed in commercial zones and the manufacturing zones
[1:53:17] plus in CA and A. And the reason that we're proposing this is that makes it consistent
[1:53:22] with the existing regulations, zoning regulations that apply to vineyards and wineries and a production
[1:53:29] of wine. Manufacturing activities on CA and A would still be permissible to the extent
[1:53:36] that manufacturing process, that specific process is consistent with requirements of that zone.
[1:53:41] Any extraction process that is utilizing a liquefied hydrocarbon, such as a butane or a propane,
[1:53:50] would have to be a closed loop system and would also have to be certified by a licensed engineer.
[1:53:56] And then finally, the activities that involve the infusion of cannabis into final products,
[1:54:02] such as edibles or creams.
[1:54:04] Those would be allowed once again in commercial zones,
[1:54:08] in manufacturing zones, and also in CA and A,
[1:54:12] and in special use zones if the underlying general zone designation
[1:54:16] allows that type of activity.
[1:54:19] So, I would like to reiterate that this is a very rough draft
[1:54:23] that we presented to the board of the manufacturing ordinance.
[1:54:26] We are still refining the terms and trying to decide
[1:54:29] which manufacturing processes go into that volatile category and which go into the non-volatile alcohol distillation, for example, is one that could go either way.
[1:54:39] We're working with the fire chiefs to come up with the best definition and the best siding requirements for those.
[1:54:47] And we will return at some point with an improved draft at the Board's direction.
[1:54:54] Supervisor Friend.
[1:54:55] Thank you, Chairman.
[1:54:55] I have a question just for clarification on the manufacturing activities on C&A because
[1:55:01] the language here is quite vague to the extent that the manufacturing process is consistent
[1:55:07] with the requirements of that zone.
[1:55:09] When we were going through the initial scoping for the EIR, we'd add discussions about in
[1:55:13] the coastal zone that we didn't want new structures to be constructed, and then we were
[1:55:16] trying to prioritize those that were existing structures.
[1:55:20] I have a concern that in a CAIR A zone that this would lead to a significant amount of new development of manufacturing structures on primarily agricultural parcels, which I don't think would be the intent of the board to do that kind of, quote-unquote, conversion of eggplant, even though it's for an ag purpose, but it's still the construction of a structure.
[1:55:39] Is there any differentiation here in the language?
[1:55:43] which again all I have is a sentence here that says consistent with the requirements of
[1:55:47] that zone. Under what you're arguing for the vineyard he would theoretically be consistent
[1:55:52] but given that this has a different margin I'd say that a vineyard would have and which
[1:56:00] is why there's so much interest in this and some respects. I have concerns of a wholesale
[1:56:04] change over or a sort of what would be deemed the highest best use to CA and A because
[1:56:10] is the value of this and turning some of those lands into manufacturing locations,
[1:56:14] which is not really, I think, the goal of the board or historically the board.
[1:56:19] So I just want to make sure that there's language that actually, or if you could
[1:56:22] as an answer that, or there's some sort of protections that would prevent that.
[1:56:24] And at this point, we are still working on the language that goes into there.
[1:56:28] What I've been told by the planners that have been assisting us on this is that in CA and
[1:56:34] A zones, the manufacturing is going to be an ancillary activity, it's not going to be the primary activity on that site, and we're going to be restricting it, and we haven't decided what percentage of the total parcel size is restricted to.
[1:56:49] However, when you look at a manufacturing center or facility, they're typically quite small.
[1:56:58] It only takes maybe 150, 200 square feet for an extraction machine, and then you'd have a dryer.
[1:57:07] So, you're only looking at a few hundred square feet on a parcel that would be dedicated
[1:57:11] towards manufacturing unless it was a commercial kitchen or something of that nature.
[1:57:16] And we will be putting language into the ordinance that puts an upper limit as to how much
[1:57:21] of a facility you can put on a CA or an A-land.
[1:57:24] I appreciate that. I appreciate that. I'll say that within my district, this is completely unrelated, but as a point of illustration, I have an individual that runs a skydiving business that actually lands as skydiving individuals on a land because he actually grows turf on that land. And so therefore landing people on the grass is ancillary use is primary use is the fact that he grows turf unique interpretation of the code to say the least, but actually defended mostly by planning as true.
[1:57:54] right? Because it's not as primary usage of the land. I just want to raise a note of caution
[1:58:00] about how hard we fight to protect agricultural primary uses in this county and that I don't
[1:58:06] want to see a and a lands converted over into manufacturing locations as defined by
[1:58:12] Ansler uses or even the primary use, basically just being whatever it is in order to really
[1:58:18] have the financial component being the manufacturing element. So I want to make sure we lock down
[1:58:24] on the language on that, and that we don't see areas
[1:58:26] throughout my district or the Pahero Valley turn
[1:58:28] into what just looks like a bunch of structures
[1:58:30] for manufacturing.
[1:58:31] Understood.
[1:58:32] Thank you.
[1:58:32] Thank you.
[1:58:34] Supervisor McPherson.
[1:58:34] Yeah.
[1:58:35] I don't know if it's the right way to categorize it.
[1:58:37] How many, what percentage of our manufacturer
[1:58:39] are volatile or non-volatile, or are the processes?
[1:58:43] Do you have any estimate about the percentages?
[1:58:46] No.
[1:58:47] I don't.
[1:58:48] The one thing I can't tell you is, at first,
[1:58:50] when I started this process, I was inclined to just
[1:58:53] simply say we weren't going to allow volatile extraction whatsoever.
[1:58:56] And it wasn't until after I sat down and spoke with Dr. Leff, I learned that the volatile
[1:59:01] extraction is necessary to preserve the entire entourage is what they call it of cannibloids
[1:59:07] which provide medicinal benefit, so you have to have not just the THC which is the fun
[1:59:12] stuff that gets you high, but the CBD and the terpenes which have, you know, when placed
[1:59:17] together this effect that makes it effective is medicine.
[1:59:21] So volatile extraction is necessary if you're going to keep it as a medicinal product and that's so the bottom line becomes how much of the product is going to be sold for medicinal purposes where you want that full on tarage and how much is going to be for recreational.
[1:59:36] There will probably be a bit of a shift in that ratio because of the passage of a Yuma after January 1st of 2018.
[1:59:44] Right now I really don't have a good idea as to what the proportions would be.
[1:59:51] I just had a couple comments about the cultivation ordinance.
[1:59:54] I know it's just a start that's going to be fleshed out a little bit more.
[2:00:00] I reviewed it, it looked like there were some areas that were unclear to me about indoor or indoor only or outdoor only or anything that it would be good to get some clarification in a future draft.
[2:00:16] on the manufacturing on the main factory.
[2:00:18] Yeah, we did have an error in there where we said it would be allowed on CA and A land indoor only.
[2:00:24] Yeah.
[2:00:24] And that is going to be changed for two reasons.
[2:00:28] Number one, it's very common to have mobile units that will actually go out and visit a farm
[2:00:34] and process the plants right there on site.
[2:00:37] And that by definition is considered outdoor even though it's normally inside the back of the trailer.
[2:00:42] And then number two, there's going to be a number of operations that would simply be working under a canopy or under some type of the shade structure.
[2:00:50] So we will be amending that in the future.
[2:00:53] I appreciate that.
[2:00:56] Also, I see that we adopted the language about the prohibition of advertising.
[2:01:01] And I think we want to limit advertising for cannabis because we're concerned about its effect on young people.
[2:01:09] And I think that the balance we struck in terms of allowing commercial locations or
[2:01:16] dispensaries to advertise makes a lot of sense.
[2:01:21] In the manufacturing side, it seems to me that if you're in the manufacturing business
[2:01:26] that you may have a need to do advertising to other cultivators or other businesses because
[2:01:35] because it's more of a business-to-business transaction, and I would hope in a future iteration
[2:01:41] of the manufacturing ordinance that we can look at that language to recognize that
[2:01:46] kind of transaction, because I think it may be a restriction on a business that would
[2:01:54] be unnecessary, because that doesn't necessarily meet our concerns that we would have generally
[2:02:01] about advertising, but this is a different kind of business and it should be treated differently.
[2:02:06] I agree. The last thing I'll just say is that I'm sure that you found in your five months
[2:02:14] that it's hard to fit everything neatly into one box, that there are topography,
[2:02:25] the situations are all just a little different and require some amount of discretion.
[2:02:33] And I hope we have language in there to give you some discretion based on the circumstances
[2:02:37] at a site to be able to make the best decision possible because I think that we did that in
[2:02:43] our cultivation ordinance and I think that's helpful in the manufacturing ordinance because
[2:02:47] you're going to be there, and there's not everything that we can conceive of up here,
[2:02:52] but you'll need to have some wiggle room to be able to deal with down the line.
[2:02:58] Agreed, and I will work with County Council to get that in there.
[2:03:01] The other thing which I think would be helpful, I know it will be helpful for my district,
[2:03:05] and my colleague can say it would be helpful for their districts, is getting some idea of
[2:03:10] mapping. What I've learned in the course of developing ordinances with buffers is until
[2:03:19] you actually see a map of what it actually means on a real spatial map, you can't pick
[2:03:29] out a number in this one at 600 feet. But maybe that means there's no place in the first
[2:03:35] district for someone to manufacture. I don't know that. I have an ad time to call GIS and
[2:03:41] get mapping, but I think it would be helpful when a manufacturing ordinance comes back
[2:03:47] that we have some idea of what those maps might look like. I know I would like it for
[2:03:52] the first district, and I'm going to make a request to GIS, but if others care about it,
[2:03:57] because if we're looking to create something to support something, we allow people to
[2:04:02] grow this plan, we should make sure that we are creating some, an ordinance that gives
[2:04:08] them no place to manufacture.
[2:04:10] Absolutely.
[2:04:11] I just think that's an important part of the development of this ordinance.
[2:04:16] There are no more questions about manufacturing, I'll let you continue on.
[2:04:19] Okay.
[2:04:20] So we're moving to the next phase, which is the retail sale and the dispensaries.
[2:04:25] The current ordinance code chapter 7.130 identified 13 dispensaries that are eligible to apply
[2:04:32] for a level one dispensary license. All 13 submitted applications, staff has reviewed those
[2:04:38] applications, has inspected the sites, and is currently going through the final process.
[2:04:44] No licenses have been issued at this moment due to a number of outstanding compliance issues
[2:04:51] with the buildings. Almost every one of the dispensaries had put up security cameras and safety
[2:04:57] lights and installed security hardware, not all of those comply with our building permit
[2:05:04] process and sometimes the door hardware doesn't comply with the fire safety code to allow
[2:05:11] immediate or emergency exit. So we are working with the dispensaries to correct those issues.
[2:05:19] Planning has designated a staff person that will assist on bringing these people into compliance
[2:05:25] an assist with the permitting process, so we can expedite that, but we would like to
[2:05:31] inform the board at this time that it's possible that not all 13 dispensaries will ultimately
[2:05:35] receive a license.
[2:05:37] But on a happy note, it's very likely that the first license will be issued within the
[2:05:42] next day or two.
[2:05:45] So moving on, there's been discussion about additional dispensary licenses, a Phase II registration,
[2:05:51] and also discussion about veterans' access.
[2:05:55] Before I dive into that, I've got some statistics I should share and
[2:05:59] that may kind of reflect as to how staff is thinking.
[2:06:04] But on average, California counties have one dispensary for every 84,000 residents.
[2:06:10] In Santa Cruz County, we have 13 dispensaries.
[2:06:13] So the ratio is one dispensary for every 18,257 residents.
[2:06:19] So because of this staff doesn't really feel that there is any issue with the ability of the public to access legal cannabis products, and we do not recommend any general expansion of the cannabis dispensary license at this time.
[2:06:37] That said, the board is also directed staff to report back on the Santa Cruz Veterans Alliance, and in general the veterans access to cannabis.
[2:06:48] As a reminder to the public, the Veterans Alliance does operate a compassion program where they
[2:06:54] donate or provide free medical cannabis to veterans.
[2:06:58] However, with us right in the middle of finishing the first phase of dispensary licenses, staff
[2:07:07] requests that I would return on May 23rd with all the necessary recommendations to respond
[2:07:14] on to the board's concerns about the cannabis access
[2:07:16] for veterans and for the veterans alliance?
[2:07:20] Are there questions about dispensaries
[2:07:22] of the veterans alliance?
[2:07:23] No, I was gonna bring that question up
[2:07:25] because you said we were gonna wait until we got into phase two
[2:07:29] of this and I'm glad we're moving in that direction.
[2:07:31] So would you have then the ratios then with one in 13
[2:07:37] or 13 and then or 14 and I mean one might be dropped,
[2:07:41] I know we're at 13 now.
[2:07:42] If one's dropped, then one's available in essence, but the ratio could be pretty simple,
[2:07:48] I guess, to get, but I think that was a point of discussion on our first go around about
[2:07:57] the veterans alliance.
[2:07:59] But I think it's something that we really directed, we were interested in that.
[2:08:05] I know I am in this phase too, as well.
[2:08:09] Supervisor Caput.
[2:08:11] Yeah, I'm concerned also, and I'd like to see the veterans' alliance included, is
[2:08:20] again, back to money.
[2:08:23] If they're going to give it away, compassionate use, give away a lot of it for free.
[2:08:29] That means there's no taxes, there's no tax money.
[2:08:33] I don't want us to get into where the money is now.
[2:08:36] if they want to give it away, how are we going to work that out?
[2:08:44] Well, as I understand it, and if I misspeak, then I hope somebody from the Veterans Alliance will correct me,
[2:08:50] but the Veterans Alliance donates 10% of everything that they have to the compassion program.
[2:08:56] So 90% is still for profit, and they would be paying their cannabis business tax on that 90%.
[2:09:03] Okay. Supervisor Coonerty. So just to, just because I think there's probably some interested folks in the crowd, maybe telegraph where we might end up, do you think that the Veterans Alliance could be included not in a phase two, but in the phase one?
[2:09:23] And do you think you could do that in, you think you could bring something to us for consider by mid to late May for that action to take place?
[2:09:32] I would defer to legal counsel on that because as I understand it, it would require an amendment
[2:09:38] to ordinance 7.130.
[2:09:41] We would prefer to not add them to Phase 1, but to come back whenever your board says,
[2:09:47] meant to late May, with a Phase 2 or whatever you want to call it, that doesn't require
[2:09:51] us to make major amendments to the ordinance that's already in effect.
[2:09:55] Okay.
[2:09:56] Yeah, I mean, I too, as no surprise to anybody, support this idea for the Santa Cruz Veterans
[2:10:04] Alliance.
[2:10:06] They're located in my district.
[2:10:08] They've been doing some really great work with veterans making a variable of free or
[2:10:14] low cost, participating in the studies with Stanford, and working with the local veterans
[2:10:21] organizations quite frankly.
[2:10:24] We've been talking about a phase two licensing program for nine or ten months.
[2:10:30] We originally wanted this to come back in the middle of November, then we put it to December.
[2:10:36] Then we put it to January, and here we are at the end of February.
[2:10:41] So when it comes time to emotion, I wouldn't mind moving this up to our first meeting in April,
[2:10:46] which is April 11th to have an ordinance come back because at some point we should start
[2:10:56] making decisions rather than bringing it back to talk about it to make some conclusions.
[2:11:03] So I'll just offer that because it seems like we've been putting this off, putting it off,
[2:11:09] putting it off, and it'll be nice to get it done.
[2:11:12] So other questions about the spenceries of the Veterans Alliance, then
[2:11:19] we'll move on to the next category.
[2:11:21] The final subject, cannabis business tax.
[2:11:24] So Santa Cruz County, the voters enacted measures K and E, which establishes cannabis business tax.
[2:11:32] It allows the board discretion to impose a tax up to 10% on every category of cannabis activity.
[2:11:38] the cultivation, manufacturing, retail sales, transporting, packaging, whatever.
[2:11:45] And then in addition to that, the Adult Use of Marijuana Act, which passed back in November,
[2:11:51] imposes or will impose new taxes effective January 1st of 2018.
[2:11:55] And these are fairly substantial taxes.
[2:11:58] There is a state tax on cultivation, which is $9.25 an ounce on dried flowers and 275 per
[2:12:08] ounce on dried leaves. There's a excise tax on retail sales that applies both the medical
[2:12:14] and non-medical. That's 15% of the retail price. There's the existing state sales tax.
[2:12:22] And when you add all of those up, it's over 23% right there exists for the state taxes.
[2:12:28] And then you add on the local taxes on top of that.
[2:12:33] The local cannabis business tax for
[2:12:35] Santa Cruz County is currently set at 7% for all categories.
[2:12:40] The budgeted revenues for this fiscal year, fiscal year 2016, 2017, is approximately
[2:12:45] $3.2 million.
[2:12:47] Our year-to-date receipts are currently, once again, rough number, $1,485,000.
[2:12:54] It looks as if we're behind in getting our revenues, however, once again I would like to inform
[2:13:02] From the board that the revenues are not going to be linear across the calendar year because
[2:13:07] of the spikes in when the cultivators actually harvest and sell their product.
[2:13:13] We miss the outdoor sale, which normally occurs in September, October.
[2:13:18] So what we are expecting to see are spikes on a three-month intervals, which, which occurs
[2:13:23] are reflects the three-month cycle for indoor cultivation.
[2:13:29] So at this point, it's just too early to predict I don't have any baseline data or experience to go off of.
[2:13:38] Going back to the state sales tax and the state excise tax, we're looking at the 23% tax minimum on the state point.
[2:13:48] That is going to possibly affect how we want to address our taxes, our local taxes.
[2:13:55] So there's a number of different options that the county could consider.
[2:13:58] We could leave the tax as is at 7% at each category.
[2:14:02] The county may want to consider dropping the tax on each category, but having it flat across,
[2:14:10] so maybe a five, five and five on cultivation manufacturing dispensing.
[2:14:14] We could implement a rebate program.
[2:14:17] We could elect to only tax wholesale transactions.
[2:14:21] We could allow, or we could consider only taxing retail sales, or we could consider a stepped or incremental approach where we start off with lower taxes to allow businesses to start up and then those taxes increase over time, all of those are different options that the county may want to consider.
[2:14:41] And because of the changing nature of the state taxes with the changing effect of January
[2:14:48] 1st of 2018, staff has been discussing the taxing issues with a number of industry
[2:14:53] stakeholders, and at this time we'd like to express thanks to those individuals who participated
[2:14:59] entered in.
[2:15:00] The names are listed in Attachment 3. But this group, while not speaking for the entire industry, did provide a lot of input from the industry perspective. And they were very concerned that if the taxes are too high, not only would purchasers go to the black market, but very likely it would discourage cultivators and manufacturers from coming forward and paying their taxes and getting the license as well.
[2:15:27] Well, and while staff appreciates and understands that perspective, we're a little bit of a disagreement
[2:15:37] here, I would point out that once again as we discussed, only 39 new businesses have elected
[2:15:43] to register to pay their cannabis business tax, even though we have 760 cultivation applicants.
[2:15:50] We feel that there's going to be a period of time that will expire before these people
[2:15:57] come forward and start paying their taxes.
[2:16:00] That's why as we discussed earlier, we would like to send out letters to all of the prospective
[2:16:04] cultivators, to all those applicants and let them know that there's a deadline of June 30
[2:16:09] of the 2017.
[2:16:10] They have to register to pay their cannabis business tax by that time, otherwise they
[2:16:15] may be considered as non-eligible to receive their license ultimately.
[2:16:19] And then we would also then propose that we come back before the board sometime late summer
[2:16:25] perhaps in August and discuss what our actual revenues were from the cannabis business
[2:16:32] tax from this current fiscal year and then once again review the options moving forward as
[2:16:38] to how the county may or may not want to react to the new state taxes that go into effect
[2:16:43] on January 1st to 2018.
[2:16:47] Supervisor McGee.
[2:16:48] This is one of the most complicated parts of this whole thing I think because I think
[2:16:53] that from what I've heard that Colorado, Washington, Oregon, once you get over the 25% threshold
[2:16:58] or something, the number that goes in the black market. I hope is that we can get as many
[2:17:11] Many people participate in the tax structure, shall we say, from the get-go because I think
[2:17:17] once we freeze them out or just make them run away from this because of the taxes, I would
[2:17:24] rather have them in the system somehow.
[2:17:26] That could have an impact on our revenue or income, I know, and it's going to be one of
[2:17:32] the biggest decisions we have that how do we do this to really have people participate
[2:17:38] Because I think if we get over a certain threshold, it's going to be those kinds of numbers
[2:17:43] that you've already released about the numbers we're participating.
[2:17:47] That's just a huge concern of mine.
[2:17:49] I know we're going to have to look at it.
[2:17:50] We're going to talk about it a long time, or not too long a time.
[2:17:53] We've got to implement it.
[2:17:55] And one of the things is this 15 percent exercise section of the state, very little
[2:17:59] if any really comes back to local government who's going to have to really be the ones
[2:18:03] that are overseeing this process directly.
[2:18:06] So that's disturbing. I'd really like to call the state to say why don't you just do it at 5% and let us go for the other 10 or something, but I don't think that's going to happen.
[2:18:17] So anyway, it's just a concern of mine that I think we have to weigh and have to get real about what we can anticipate, whatever the figure is, we decide on.
[2:18:30] What is the going to be the revenue structure because we already have some folks out there that are looking to this
[2:18:35] Vananza of revenue coming into the county and how how we can just spend it because our pockets are full and I don't know that
[2:18:42] We can really count on that kind of a
[2:18:45] An outcome. It's just going to be a real careful decision that we have to make but
[2:18:51] I wish we could get the state to
[2:18:53] kind of ease its
[2:18:54] It's 15% but it's not going to do it, so we just have to act accordingly.
[2:19:04] Supervisor Secretary.
[2:19:06] So, and I agree that this is one of the more complicated areas.
[2:19:11] My question first is, Monterey County was looking at estimated cannabis revenues of $30 million
[2:19:19] in their budgets.
[2:19:22] Is it reasonable to think that we're a smaller county, but not significantly different,
[2:19:26] that we could have annual revenues in excess of $10 million.
[2:19:37] Unfortunately, I didn't bring those numbers with me, but personally, I do not think that it's unreasonable for us to anticipate those types of revenues.
[2:19:46] From the information has been provided to me and hasn't been vetted, we are looking at the dispensaries do $35 million worth of business a year.
[2:19:59] The cultivators may be doing $70 to $80 million per year.
[2:20:04] We're not really sure.
[2:20:05] We'll have a much better idea once
[2:20:06] for through the registration and licensing process.
[2:20:09] The manufacturing is a really unknown,
[2:20:13] and there's a very wide range.
[2:20:14] The absolute lowest limit is $15 million per year
[2:20:18] of gross receipts on manufacturing.
[2:20:20] But I've had folks in the industry tell me
[2:20:24] that the real estimate is somewhere between $40 and $70 million per year.
[2:20:28] So when you add all of those together, you're looking at something that's between $177 million
[2:20:33] and $225 million or $250 million per year.
[2:20:37] This is a major industry.
[2:20:40] And if we are successful in getting the members of the cannabis businesses to become licensed
[2:20:48] to pay the taxes, then yes, absolutely, those are reasonable estimates.
[2:20:54] And then my second question, it's a question slash comment, which is, I agree that the
[2:21:00] 7 plus 7 plus 7 plus 15 plus sales tax gets to a place where you're overtaxing.
[2:21:06] But I'm curious as to how much of that is actually going to occur, because from what I understand,
[2:21:12] 90% of the cannabis grown is exported, so that would only be taxed once.
[2:21:17] plus we're giving cannabis growers the chance to manufacture to some extent.
[2:21:23] So that would be just taxed once, seven percent.
[2:21:26] We're giving potentially some of the dispensaries the chance to cultivate.
[2:21:33] So that would just be taxed once.
[2:21:36] So I'm trying to get it.
[2:21:38] How are we getting to two or three percent of potential cannabis sales?
[2:21:44] that, and then some cannabis is not manufactured, it's just grown and then sold.
[2:21:50] So, are we talking about 2% of the potential market that's actually being taxed at this,
[2:21:56] potentially taxed at this 21% rate?
[2:21:59] So, I'm going to, unfortunately, have to go into a bit of detail to answer your question.
[2:22:04] Sure.
[2:22:04] Starting off with the fact that, yes, from what I've been told, that probably 90% of the cannabis
[2:22:09] was cultivated in Santa Cruz County as exported to other parts of the state.
[2:22:14] And perhaps 85% to 90% of the manufactured products are actually exported out of the county.
[2:22:20] So they would only be paying the 7% once.
[2:22:23] The question becomes for us is that 7% competitive with other counties,
[2:22:30] or would we then be encouraging people to not necessarily report everything that they've done,
[2:22:36] or not register whatsoever, on the part, on the portion that's actually sold here in Santa Cruz County.
[2:22:45] Roughly, from what I've been told, roughly 40% of the sales are from manufactured products and the remaining 60% is on the actual buds.
[2:22:54] And most people project that ratio will change with more and more of the manufactured products being purchased.
[2:23:02] So, a good number, 40% of what's sold in the dispensaries is actually going to be hit with the 7-7-7,
[2:23:10] unless the dispensary is also the cultivator.
[2:23:16] From what I've been told in order to supply a dispensary,
[2:23:20] it probably takes 10 cultivators for everyone dispensary,
[2:23:24] simply because your harvesting is going to hit at different periods of the year,
[2:23:28] And once again that three month cycle, different growers specialize in different strains.
[2:23:34] And normally when you go into dispensary you will see an array of maybe 15 or 20 different
[2:23:39] types of product up there, different buds.
[2:23:42] And then finally if something happens, if somebody gets hit with mold or mildew or mites,
[2:23:51] somebody could lose an entire crop and the dispensary can't afford that.
[2:23:55] So, that's why they have to have a minimum of 10 different cultivators applying them.
[2:23:59] The bottom line is, at the dispensary 40% of those products sold would see that 777 hit.
[2:24:07] The other 60% could range anywhere from 7% to 14% to paying upon whether the dispensary
[2:24:15] owner was also the cultivator or not.
[2:24:17] But when you also have cultivators who are manufacturers, so in that 40% not all that-
[2:24:24] That is true.
[2:24:25] That would be taxed.
[2:24:26] That is true, right as well.
[2:24:28] Okay.
[2:24:29] Yeah.
[2:24:29] I mean, I'm going to have a series of questions, I think, to prepare realities we don't really know a lot right now.
[2:24:38] And if we come back in August along the series of questions that I'd like to see in order to better inform this discussion.
[2:24:45] Very good.
[2:24:46] If I could just also, and we also have the changing landscape at the federal level in terms of the tax structure
[2:24:54] structure in the role of the counties in cannabis cultivation, and that's going to add
[2:24:59] another level of uncertainty. But I think you're right, there's a lot we don't know.
[2:25:06] Mr. Peterson, I wonder if you could share with us what you know about the research about
[2:25:13] taxing this product.
[2:25:15] Well, there's been a considerable amount of research, and of course it's focused around
[2:25:19] Colorado, Washington and Oregon, and a great deal the research had to do with at what
[2:25:25] point do regulations and taxes that cause an increase in prices affect the black market
[2:25:35] and the effect the sales and the revenues.
[2:25:38] There's something called an elasticity of demand, which is a business term that I just learned
[2:25:42] recently, and basically what it means is that as you raise the price of a commodity, then
[2:25:49] And as certain, the demand will go down.
[2:25:52] And what that ratio is varies according to the product.
[2:25:55] And then in the case of cannabis, it's not only will the demand go down if it gets too
[2:25:59] expensive, but also will it drive people to the black market because there is an available
[2:26:04] source out there for black market cannabis.
[2:26:08] Early studies from 2010 through 2013 had a fairly low elasticity of demand, which meant
[2:26:16] that raising the price really wasn't going to affect sales much. However, the latest study
[2:26:21] from 2015, and that was a study was commissioned by the state of Colorado, came up with an
[2:26:27] elasticity of demand of negative 3.4. And what that means is, for every increase in price
[2:26:33] of 10%, your sales at a dispensary will go down 34%. That's an enormous elasticity of demand
[2:26:40] factor for cannabis, and once again what the authors concluded was it was because
[2:26:46] of the availability of the black market.
[2:26:49] Well, that's, I think that that's interesting.
[2:26:53] You know, I'm not sure if everybody got the elasticity of demand.
[2:26:56] The former economic student understood it, but the idea that as we put the price up,
[2:27:05] people will go to other sources.
[2:27:07] I mean, I think from a policy perspective, what we've been trying to do, at least in my
[2:27:12] mind, is work collaboratively with this group, right, whether they be dispensary owners,
[2:27:19] cultivators, the general public, to come up with a reasonable set of regulations that achieve
[2:27:26] our policy goals, right, protect the environment, protect the neighborhoods, and ensure access.
[2:27:31] And at least in my opinion, I found that better that when we work with people, we get a lot more done than when we try to just make them do what we want.
[2:27:45] And so when I hear something like a negative 3.4 elasticity of demand in a state of Colorado study, the state that had legalized recreational cannabis the longest.
[2:27:59] so they have the best data that we could take a look at.
[2:28:04] I think it should give us pause about the casualness in which we set rates
[2:28:11] and our efforts, we really are looking at two pieces, right?
[2:28:16] We're looking at the next nine to ten months, and then we're looking after January 1st, right?
[2:28:21] So I would argue that we have an institutional interest to get people into the system and benefit from the volume of sales that you mentioned.
[2:28:36] When you look at a $200 to $250 million group of sales, we don't need the high tax rate if we can tap a lot of that.
[2:28:47] And what we've heard from the cannabis community for years is legalize it, regulate it,
[2:28:57] tax it.
[2:28:59] So, that's what we're trying to do.
[2:29:02] But we shouldn't perceive to be in a green rush to try to just generate as much money as possible
[2:29:12] because as the research shows that you could push it too far and then you drive people the other way
[2:29:19] and that creates a lot more problems for us because if people choose to go to the black market
[2:29:24] then we have to spend enforcement resources, more enforcement resources trying to capture those
[2:29:31] folks, stop those operations and not benefit from the tax sales. I'd rather have legalized cultivators
[2:29:38] paying taxes and adding to the general fund. I think that should be our policy goal.
[2:29:44] The choices that we have here are in some ways interesting, but in some ways not realistic
[2:29:51] as choices, because there isn't enough information, right? I mean, it's, you know, we've had this
[2:29:58] We're both tax fasts.
[2:30:00] Since the beginning of November, and a local tax rebate program might be a great program, but there's no meaningful information in this report that would tell us how you would do that, what it would mean, what kind of revenue might be generated from it. So, I could come up with three other ways in which the exact same amount of information is here. So, we've recently received a letter from a number
[2:30:29] number of cultivators and dispensary operators asking for a modest decrease.
[2:30:36] I would declare modest of lowering everything down to 5 percent.
[2:30:42] And I think that, I would just say, I think that's in our interest to try to work with
[2:30:47] them to help make that happen and use our partners in the cannabis community to help us bring
[2:30:55] people into the system rather than trying to figure out a way in which, if you don't
[2:30:59] or do it by June 30th, there's a consequence, and then we're going to be playing whack-a-mole
[2:31:06] like we've done in the past, and I don't think that achieves our policy goals.
[2:31:11] So I think I'm similar to where Supervisor McPherson was, and when I'd be interested
[2:31:20] to take a look at that research for the State of Colorado, because I think that should
[2:31:23] tell us something about what we're doing here in California.
[2:31:28] So, is there any other pieces? Any other questions? People had? Well, now we're going to open
[2:31:34] up to members of the public, then. Thank you, Mr. Peterson. Thank you. And we have a lot
[2:31:41] of things on our agenda today. I know there's a lot of interest in this. So, be helpful to see
[2:31:47] how many people want to testify today. Could I see a show of hands?
[2:31:56] I'm going to give you two minutes
[2:31:58] and the hopes that we could hear from everybody.
[2:32:01] So two minutes.
[2:32:05] Good morning.
[2:32:06] Good morning.
[2:32:06] Morning to the board and to Santa Cruz County residents.
[2:32:10] I want to be able to say that this is good policy.
[2:32:12] These are critical services that are needed for the American public.
[2:32:17] And I want to be able to say your report was really nice
[2:32:19] and the way you gracefully presented it was very really welcoming.
[2:32:23] And I want to be able to thank you for your leadership.
[2:32:26] You know, I have a charismatic can.
[2:32:29] I don't know if members of the public can see that, right?
[2:32:31] And I do suffer from PTSD, right?
[2:32:34] As a member of the public, sometimes my economic structure is a little difficult.
[2:32:38] So being on the medical cannabis, getting the car going to the doctors doing all that stuff is very difficult.
[2:32:48] But being able to enjoy the decompressing recreational use of cannabis will help.
[2:32:56] So being able to regulate and make it friendly in Santa Cruz County, I think it's a good thing.
[2:33:01] And then also having a wheat festival where we bring people from the public to come and
[2:33:06] participate so that it has a good reputation, I think it would be important.
[2:33:11] Thank you.
[2:33:11] But I want to ask the board to support this.
[2:33:14] Thank you.
[2:33:16] Good morning.
[2:33:17] Good morning board.
[2:33:19] My name is Colleo Mitalo-Keele.
[2:33:20] I am a director for the County People's Collective as well as a board member for the ASC.
[2:33:25] I'm going to read you what I've written here.
[2:33:26] I would like to thank each of the supervisors and the county staff for the years of sincere efforts to create sensible regulations for cannabis,
[2:33:33] perhaps at times this recognition has been lost.
[2:33:36] And instead viewed as an entitlement which is not the case.
[2:33:40] The resources the county has dedicated to cannabis is staggering and remains a testament to the commitments and values of our board and our community.
[2:33:47] So thank you.
[2:33:48] Today I'd like to focus on taxes.
[2:33:49] The tax issues have been discussed over dozens of hours during the last several meetings between the licensing manager at the CAO's office and community members, including myself.
[2:33:58] My takeaway is that the industry is overburdened with the tax rate that is severely reducing the revenue potential for the county.
[2:34:06] The spend trees continue to shoulder the tax burden while producers and manufacturers remain reluctant to step forward simply for the hope of receiving a license, while paying a tax rate two to three times the rate since surrounding counties.
[2:34:17] That is an issue.
[2:34:19] Measuring requires all cannabis businesses to pay taxes, yet few are at this point in time.
[2:34:25] There are thriving businesses who need incentive to participate, so let's not drive them away after years of innovation and persistence towards compliance.
[2:34:32] The beauty of this is that the county and the industry's objective are symbiotic in nature.
[2:34:38] We can cast the wide network cultivators and manufacturers by lowering their specific tax rates to only 2.5%.
[2:34:44] Samultaneously, give dispensaries a break down from 7% to 5% for being good partners with
[2:34:51] the county for many years now, having low impact on the county resources and faithfully
[2:34:56] paying overestimated tax revenues for the last several years.
[2:35:00] Do this and watch the revenues skyrocket overnight.
[2:35:05] To clarify some statements made earlier today, the county is only behind on the CBT this year
[2:35:11] due to the deficit from non-retail businesses.
[2:35:14] Retailers, however, continued to pay close to 300% of what was originally advertised on the ballot.
[2:35:20] There's a rude awakening coming with this 15% tax in 2018.
[2:35:25] That's not the knife at, thank you.
[2:35:27] Thank you.
[2:35:32] Good morning.
[2:35:34] Still this morning.
[2:35:36] Thank you.
[2:35:40] There are eight action items that you gentlemen are supposed to act on today on this item on the agenda.
[2:35:50] There's no two minutes, two hours, we couldn't address all the various issues that you're faced.
[2:35:59] And so, what I want to address is the process that gets you to solve these issues.
[2:36:06] And the process that has gone on so far has been fits and starts and then public meetings
[2:36:16] where you are faced with a line of people giving your two-minute input when what you need
[2:36:23] is real data, you know, some real sophisticated analysis, I mean this tax issue is a perfect
[2:36:35] For example, I mean the permutations are endless and you could with the data that is available
[2:36:45] which, you know, there is no data, really.
[2:36:51] You know, one point, one data point is what we've seen is what the dispensaries sell.
[2:36:56] That's it.
[2:36:59] And I would like to see the board get back to getting more people involved in this process.
[2:37:07] And I think that that's the only way that you're going to be able to have the information
[2:37:12] that you need to come to good decisions.
[2:37:14] So I'd ask you to come up with one more policy objective.
[2:37:18] You've got your three. I'd like to see the board recognize that the cannabis industry
[2:37:25] is a valuable part of this community and partner with them to create a sustainable, productive,
[2:37:36] new industry in the county that benefits all of us. Thank you.
[2:37:40] Thank you.
[2:37:44] Good morning. Jump right in. My name is Jeff Nordall.
[2:37:48] I want to specifically address manufacturing. I did read the draft proposal.
[2:37:54] and this is just a not a great but a constructive feedback on manufacturing and what I'd like to potentially propose is there's all different levels of manufacturing but a lot of them including some processes that I'm involved with involve nothing more than a crock pot, a blender, a juice machine and some spatulas and they require just
[2:38:22] maybe 10 feet by 12 feet of space and so as far as requiring that type of
[2:38:34] processing for especially for edible type products or body products like
[2:38:40] salves and such, the requirement to house those in commercial zones seems
[2:38:48] excessive and what else it would be very limiting to people trying to do start-up
[2:38:54] businesses with this type of manufacturing. To give an example of another
[2:38:59] industry that's operating in Santa Cruz, small family vineyards, I did a number
[2:39:07] of parcel research lookups on GIS and it turns out a lot of these vineyards can
[2:39:15] can cultivate harvest, crush the grapes, store the wine on site, then bottle it and actually
[2:39:23] have tasting rooms all on rural ag or special use with no special site designation plan.
[2:39:30] So hopefully we can follow that model for this very simple and I would call it non-solvent
[2:39:38] or solvent free manufacturing where it's basically cannabis, food and body products.
[2:39:43] Thank you.
[2:39:48] Again, I'm Mark Rio from Larkin Valley.
[2:39:53] Two things, I believe two things.
[2:39:56] Yesterday, I attended the forum regarding the Environmental Impact Report.
[2:40:01] It's my understanding that an environmental impact report,
[2:40:05] according to CEQA, has a requirement to give alternative,
[2:40:10] an alternative or alternatives to what the proposed or the direction is of the environmental impact report.
[2:40:17] There was one, there was one for a more permissive alternative to the proposed report, but there was not one regarding an alternative proposal, which was more restrictive.
[2:40:33] I'll point out that when I looked at both of the maps of the county, the majority of the area of the unincorporated portions of the county showed zones that would be permissible.
[2:40:47] or cultivation of marijuana. The second thing I have to say is that I was told by one
[2:40:54] of the employees of Mr. Peterson's department, and I have not had an opportunity to speak
[2:41:02] with him directly, but I was told that the process for licensing would be ministerial after
[2:41:10] the ordinance was passed and that in all likelihood Thao's ministerial approval parts would
[2:41:19] be rushed through to get to the deadline before the end of the year.
[2:41:23] I'll point out that this is a drug weed.
[2:41:27] This is not just a structure that falls within the purview of normal permitting process of
[2:41:32] the planning department.
[2:41:34] During the registration process, there was no provision for public hearing for possible registration per parcel.
[2:41:44] I think it is part of the due process, it's necessary, for a public hearing for each parcel for licensing.
[2:41:54] Thank you.
[2:41:57] Good afternoon.
[2:41:58] Good morning, good afternoon, and good night knowing.
[2:42:02] I just wanted to thank everybody really quick so I can get through all my points.
[2:42:06] Thank you to every single person in here and all your staff, because quite simply we're
[2:42:11] blessed to be in Santa Cruz and to have such a great county to work with.
[2:42:16] So with that said, I'm going to try and get through everything.
[2:42:19] I think what my main concern here is who's going to be most at risk from this 7% tax as it is right now
[2:42:27] for the next nine months. And let's put aside the composite 21% for a minute.
[2:42:33] 7% as it translates is the highest tax bracket in the state.
[2:42:40] So who you're affecting right now in Santa Cruz County are small, local, family-run businesses
[2:42:47] like myself.
[2:42:48] And we have to compete in the state market, that's just a fact.
[2:42:54] So right now we, especially manufacturers, we don't have the luxury of setting our rates,
[2:43:01] it goes by state.
[2:43:02] So, we're consuming the tax rate right now, which is on the highest tax bracket.
[2:43:07] So, what we're just requesting right now is to be in that middle tax bracket.
[2:43:12] So, to help give our small local family businesses the chance to survive the changing current.
[2:43:19] So, with that said, we didn't add on January 1st, the 9-11% grocery seats that is going to be added to cultivators.
[2:43:29] That was translated based on, again, it was 2016 benchmark pricing on price per pound
[2:43:38] and trim, and I calculated that with Kirsten Nevedal, who is one of the experts on the state
[2:43:43] and local levels on dealing with taxes, so it wasn't just pulled out of the air.
[2:43:49] The rebate, we went over that with staff, and unfortunately a rebate would not give the
[2:43:59] end user, the patients that rebate.
[2:44:02] And so it wouldn't lower prices on the patient level.
[2:44:04] And so that was a big concern for us.
[2:44:06] Thank you so much.
[2:44:09] Good afternoon.
[2:44:12] Good afternoon, Chair, Vice Chair, members of the board,
[2:44:16] county staff.
[2:44:17] My name is Jason Sweat.
[2:44:18] I'm director and co-founder of Santa Cruz Veterans Alliance.
[2:44:22] Since we've stood here before you last June,
[2:44:25] we've made, we've done a lot of things.
[2:44:28] We've, you know, concluded a study with the Veterans Administration and Stanford University on the effects of cannabis with PTSD, TBI, and sleep.
[2:44:38] We're waiting to hear those results back that are being published as we move forward throughout the year.
[2:44:45] We've also donated, you know, through our toy drive that we do every year, you know, to the Veterans community back in December.
[2:44:54] We held the lease of Tukach held the Operation Lover Vats and everything where we provided toys for.
[2:45:00] Or the members of the community. So I highly, I respectfully request that this board allows us to continue our mission throughout the year and into the future. Thank you.
[2:45:24] It's great honor to be here before the Board of Supervisors. And I'm Albert Brett. I'm a Vietnam veteran. I'm an Idaho resident. I've lived here since October 15 as a medical
[2:45:37] Sojourner.
[2:45:38] And in Idaho, I'm a criminal, I have a war now for my arrest, I've been fighting my
[2:45:43] pancreatic cancer with high quantities of cannabis, full spectrum, and I take it as
[2:45:50] an oil.
[2:45:52] I'm currently getting it through the veteran's alliance here, Jason, and I'd be lost
[2:46:00] without it.
[2:46:01] I wouldn't be lost.
[2:46:02] I would be, I have endocrine pancreatic cancer.
[2:46:05] It was taken out of me on June of 2014, that I've gone for cat scans.
[2:46:12] I am currently, there's no evidence of my, of that disease in my body.
[2:46:17] However, it's been taken out of me.
[2:46:19] It's the very one that got Steve Jobs.
[2:46:22] I don't have the money for a new pancreas.
[2:46:26] He was able to afford when it did work.
[2:46:28] But the cannabis is stopping the gene progression of that of the replicating cells.
[2:46:35] Now, you know, I wish I was before, I wish I was standing before our United States Senate and I asked for the scheduled one to be taken off.
[2:46:48] I need my medicine. I'm getting it. I'm a member of WAM. WAM wants $1,500 a month for my medicine.
[2:46:55] I'm able to procure it with assistance through Jason and his end to go.
[2:47:04] Anyway, please, please allow these men to give us our medicine.
[2:47:10] Thank you.
[2:47:12] Good
[2:47:18] afternoon.
[2:47:20] Hi, my name is Brian Anderson.
[2:47:21] I'm a member also of the Santa Cruz Veterans Alliance.
[2:47:25] I'm a disabled service-connected veteran.
[2:47:27] And if it wasn't for them, my pocket would be empty.
[2:47:32] The cannabis is my only pain medication that I use.
[2:47:39] If it wasn't for it, I wouldn't be able to function on a daily basis.
[2:47:44] And the SCVA covers at this point about half of what I need to consume a month.
[2:47:50] The other half comes out of my pocket.
[2:47:52] I get a whole $1,500 a month through the VA as my income, and approximately $400 of that has to be put out for my medicine, and it's a great strain, and if it wasn't for the SCVA, there would be a lot of veterans in this county, because there's just a minimal few of us here today that belong to the group.
[2:48:19] And we would be resorting back to black market industry and so forth.
[2:48:27] And like myself, I find that I would prefer to go to a club so that I know what I'm getting.
[2:48:34] The quality, that there's no pesticides, the organic manufacturing of it.
[2:48:42] So that I know what I'm consuming.
[2:48:44] And if it wasn't for them, and their efforts, there would be quite a few people in this county right now that are veterans, that have served the country, that are in need of this thing.
[2:48:58] So I would ask the councilor to please allow them to continue giving us our medicine and the way that they do.
[2:49:07] Thank you.
[2:49:08] Thank you. Thank you for service.
[2:49:14] Good afternoon.
[2:49:14] Good morning, Chairman Leopold, county board members, staff.
[2:49:19] My name is Seth Smith, I'm a member and an employee of the Santa Cruz Veterans Alliance.
[2:49:25] Many of you have met with me over the last several weeks or a few months.
[2:49:29] I promise we will stop, I'll stop counting you and follow you as soon as this is all over with.
[2:49:35] I just wanted to come up here today and say, you guys all know my feelings already on this.
[2:49:39] And we've spoken about this a lot, and you'll hear from a few other people who support us at our mission.
[2:49:46] We really want to be a part of this community long term.
[2:49:49] We're trying to find a way to do what we do, you know, accomplish our mission in a sustainable way.
[2:49:54] That's in keeping with the values of the community, the county.
[2:49:59] We're totally on board with being regulated.
[2:50:02] We're totally on board with this market coming into the light.
[2:50:04] We see the benefits of this on a daily basis with the members, our veteran patients that
[2:50:09] we treat.
[2:50:10] We currently have over 500 veteran members in the San Cruz County area, and they're coming
[2:50:16] to us for anything from chronic pain to disease, to anxiety and PTSD, to traumatic brain injuries,
[2:50:23] and they're seeing great results.
[2:50:25] A lot of them are self-transitioning off of opioids, which are much more addictive, or cannabis
[2:50:29] isn't addictive at all, but opioids which are addictive and potentially very harmful, and
[2:50:34] and their self-transitioning on to cannabis.
[2:50:35] We'll be advocating for this at the federal level,
[2:50:37] at the state level.
[2:50:39] We'll be taking a lot of your concerns
[2:50:40] that you have regarding the federal laws
[2:50:43] and state laws to those law makers as well
[2:50:46] and advocating there.
[2:50:47] So we wanna be a part of this community long term.
[2:50:49] We hope that you guys see that.
[2:50:50] We hope that you see that we're interested
[2:50:51] not just in cannabis, but in veterans
[2:50:53] and community across the spectrum.
[2:50:55] And we're trying to participate
[2:50:56] and be active leaders in that realm.
[2:50:59] So thank you for your consideration.
[2:51:01] Thank you for all your time.
[2:51:02] We ask that you please let us continue this mission.
[2:51:04] Thank you.
[2:51:05] Thank you.
[2:51:10] Afternoon.
[2:51:11] My name is Socrates Rosenfeld.
[2:51:13] And to be honest with you, I actually didn't know that I was going to get up here and speak.
[2:51:17] But just through what transpired today, I thought compelled to do so.
[2:51:20] I'm a military veteran.
[2:51:22] I graduated from West Point.
[2:51:24] I was a Ranger Qualified Apache helicopter pilot.
[2:51:27] I commanded a attack helicopter unit in Baghdad, Iraq, in 2009.
[2:51:31] I never consumed cannabis before my entire life until I actually left the Army.
[2:51:36] wasn't diagnosed officially with PTSD, fortunately, I don't have pancreatic cancer.
[2:51:42] But what it did for me was it brought me a sense of well-being that I could not replicate
[2:51:46] with any other product.
[2:51:48] I used to chew tobacco, I used to drink a lot of alcohol, and this plant was the only thing
[2:51:53] that really brought me back to homeostasis.
[2:51:56] And we make delineations between medicinal and recreational, but this is really a product
[2:52:01] that enhances the well-being of others, whether that's connecting to loved ones.
[2:52:05] Thank you, really appreciating even a sunset out here on the West Coast for me, that's well-being.
[2:52:14] And I was fortunate enough, I graduated from MIT, I brought my take company out here to Santa Cruz with the intent and purpose of providing legitimate accountable access to cannabis for consumers, veterans and non-veterans alike.
[2:52:28] And I was fortunate enough to link up with Santa Cruz Veterans Alliance.
[2:52:32] And their values are pretty serious, and they overlap with the values in the veteran community, the values in Santa Cruz, and the values of the cannabis community as a whole.
[2:52:44] So I hope they can continue their mission, and I appreciate your time today, thank you.
[2:52:48] Thank you, thank you, thank you,
[2:52:52] good afternoon.
[2:52:54] Good afternoon, my name is Chad Payton, I'm a resident of Santa Cruz County, and I actually don't even use cannabis.
[2:53:03] I'm West Point grad with these guys, I also serve in Iraq and Afghanistan, but what I have seen is the direct and profound impact it has on people who do suffer from PTSD or any of the other wide range of effects due to their combat activities.
[2:53:19] And, you know, I met up with these guys after I saw what they were doing out here.
[2:53:23] And just through their compassion program and also just employing veterans locally and just the services they provide locally to this county.
[2:53:33] I just have to echo exactly what these guys are saying and what hope that you guys would allow them to continue to help veterans and be a part of this community because I think they're going to make it better.
[2:53:45] Thanks.
[2:53:46] Thank you.
[2:53:47] Thank you, service.
[2:53:51] Good afternoon.
[2:53:51] Thank you.
[2:53:52] Good afternoon.
[2:53:54] Thank you very much, Board.
[2:53:55] Staff.
[2:53:57] My name is Aaron Newsom, I'm the co-founder and operations director of the Santa Cruz Veterans
[2:54:00] Alliance and also an Afghanistan combat veteran in the United States Marine Corps 2004-2005.
[2:54:07] We really appreciate the language that was put into the draft ordinance pertaining to the
[2:54:11] Veterans Alliance and the veteran community here.
[2:54:14] I know you're all aware of the community we're trying to build here with our Veterans
[2:54:17] compassion program. We would like to continue to give out free medicine to disabled low-income
[2:54:22] and in-need veterans here in Santa Cruz. As you know we've completed the study with the Department
[2:54:28] of Veteran Affairs in Sanford University in the process of publishing that. We would like to do
[2:54:33] more studies with the VA. We will be doing more studies with the VA and we just ask for a safe
[2:54:39] and welcoming place to do that. I think this is a much bigger issue than some people might think.
[2:54:46] The veteran's suicide rate is 21% higher than the general population.
[2:54:51] Veteran opioid overdoses are almost double the national average and
[2:54:55] prescriptions for hydrocodone, oxycodone, methadone, and morphine have jumped
[2:54:59] 270% in the last 12 years amongst VA patients.
[2:55:04] We have to show our veterans that we really care and that we're really willing to do
[2:55:08] something and put some backbone into what we say.
[2:55:12] not just give lip service and not just a pat on the back.
[2:55:15] As veterans, we're used to the struggle, we're used to the game of hurry up and wait, and we're used to play in the long game, which we will continue to play.
[2:55:26] And we're in it for sustainability, longevity, and this mission will sustain, and we really appreciate your support.
[2:55:33] Thank you very much for your time.
[2:55:35] Thank you.
[2:55:35] Good
[2:55:39] afternoon. I'm Brenda Chadwick. I'd like to thank every veteran here, men and women. I hope there are some women here for their service.
[2:55:49] And I 100% support their effort. Even though I'm not a veteran, I have donated to the Santa Cruz veterans.
[2:55:59] But curiously, I'm not going to be able to do that once the new ordinance has passed.
[2:56:05] I do have a personal medical cannabis garden.
[2:56:13] I've been involved ever since I found out there was a C4 committee attending them.
[2:56:19] I registered non-anonymously.
[2:56:23] I am registered to pay my taxes.
[2:56:26] But my little garden is a 10 by 10.
[2:56:33] And the first time that I sold my access was to pay for medical bills that I didn't
[2:56:42] have the money for.
[2:56:44] So that was really life saving for me.
[2:56:51] I want to be part of the answer, I want to be part of the process, I want to feel that
[2:56:58] that I am contributing to my community.
[2:57:02] I'm doing everything in my power to do that,
[2:57:05] but the ordinance leaves me out
[2:57:10] because of where I live.
[2:57:13] I'm moving forward because that's how much I believe
[2:57:17] in what needs to be done.
[2:57:20] And I will continue to do that
[2:57:23] and hope that your board will be more inclusive
[2:57:27] In the small growers who do want to participate, and lastly, I wouldn't just quickly remind everyone that the registration process started before knowing that the type I see license tier through the state.
[2:57:44] So I hope you take that into consideration.
[2:57:47] Thank you all very much.
[2:57:48] Thank you.
[2:57:53] Good morning.
[2:57:54] My name is Peter Brazil, I'm here on behalf of Suncrest Nurseries.
[2:57:58] It's an agricultural operator who has been in the county for decades, who is interested in cannabis cultivation.
[2:58:05] Their first concern is regarding the indoor only kind of language within the current cannabis ordinance, cultivation ordinance.
[2:58:14] They want to point out that greenhouses are much more agriculturally friendly environment from which to grow in.
[2:58:22] there is a need, we do recognize need for indoor grow, it provides a different kind of flower product in greenhouse wood.
[2:58:29] There's quite a few greenhouses in this county as there are in the surrounding counties which suffered greatly from NAFTA and a few other regulations of the 90s.
[2:58:36] This is allowing them, repurposing of these greenhouses.
[2:58:40] We're not saying using every single one of them for them, many of these will operate smaller, but they want the ability to cultivate within those facilities.
[2:58:48] In addition, addressing another aspect of concern is the limitations on acreage for these facilities.
[2:58:54] Again, we're talking about an agricultural product and an agricultural region.
[2:58:59] Anybody who's familiar with that understands the margins and fluctuations that occur
[2:59:03] and unless you can ramp up your size, you many times cannot compete or survive.
[2:59:08] Lastly, I'd also like to point out some issues regarding multiple permits
[2:59:13] for some people called premises, parcel, lot, whatever you want to call it.
[2:59:17] Again, this goes to the idea of being able to ramp up a ramp down and modify your operations
[2:59:23] to reflect the changing industry.
[2:59:25] Thank you very much for your time.
[2:59:26] Thank you.
[2:59:27] Good
[2:59:29] afternoon.
[2:59:30] Hi.
[2:59:30] I'm Grant Palmer, Canacruz Collective, and Santa Cruz Normal.
[2:59:36] First of all, I just want to say I agree with everything Peter said.
[2:59:39] The only way to really keep middle-class people to afford to keep farming is to allow them
[2:59:45] use more their property to cultivate, they can't, you know, not every farmer can afford 25 acres in Santa Cruz.
[2:59:52] The other issue is, this year last year, we gave away $550,000 and gave away and discounted.
[3:00:00] We're the cannabis last year. A lot of that to our really serious cancer patients and so on, it comes in the form of oil, because that's what I can afford to give people. A lot of these seriously ill people require a tremendous amount of milligrams of cannabis, and I can't afford to give them that much cold water hash. There's not that much. I have my store. It requires all the solvent extraction. And when we are basically having that in very such a way,
[3:00:29] limited zoning, there's not going to be any place to produce it, and it's going to go back to the black market.
[3:00:37] We need to have those zones available, and most of these solvents used are already on farms.
[3:00:43] You know, most farms have a propane tank on site, so this really isn't that different.
[3:00:49] I'd like to at least study that in the environmental impact report, thank you.
[3:00:52] Thank you.
[3:00:56] Good afternoon.
[3:00:57] Good afternoon, my name is Ashley Shields, I am the new executive director of Santa Cruz Normal, I'm very happy to be here today.
[3:01:07] I'd like to thank all of you for your contributions and your persistence in continuing to develop a fair regulation for cannabis.
[3:01:14] We very much appreciate that in this county.
[3:01:18] I would like to address my concerns regarding personal use guidelines.
[3:01:26] I noticed in some literature that we are limiting personal cultivation to one per parcel.
[3:01:34] In the event that there's multiple duplexes on one parcel, or an apartment complex on one
[3:01:40] parcel, this presents a little bit of a conflict of interest regarding everybody's
[3:01:45] individual ability to have a personal cultivation of six plants or up to six plants.
[3:01:51] I am also concerned regarding the requirement of a written letter from a landlord.
[3:01:58] At this point, we're putting our landlords in the position to commit a federal crime
[3:02:02] in writing.
[3:02:04] I am inclined to think that they are not going to be willing to do this, which also puts
[3:02:08] restrictions on personal use that are not actually written.
[3:02:12] They're much more subtle at that point.
[3:02:13] I noted as well that there was language regarding viewability, AMA references that personal
[3:02:22] cultivation should not be viewable by the public.
[3:02:25] I noted in our literature that that also is inclusive of adjacent parcels.
[3:02:32] I'm concerned that that is going to promote privacy breaches.
[3:02:38] We're encouraging other people to look into other people's windows at that point.
[3:02:41] If it's a medical growth, then you're also addressing HIPAA breaches, which is a whole new type of privacy regulation.
[3:02:49] I would like to also support everybody who's spoke regarding high taxation.
[3:02:55] This absolutely does push the black market and encourage the black market.
[3:03:00] So for me, I would very much like to caution the board that over regulation of personal use,
[3:03:10] high tax rates and a trust that is that regarding the permitting process.
[3:03:15] Thank you.
[3:03:16] Thank you, Alphe.
[3:03:23] My name is Becky Steinbruner and I want to thank all of you and Mr. Peterson for your good
[3:03:29] work and thank all of the people that took the time out of their day to come here and say
[3:03:34] their thoughts.
[3:03:36] I also want to bring you to why there have been two sheriff's deputies brought into the
[3:03:40] room in addition to the security guard.
[3:03:43] I have not seen them here this morning earlier, and I think it is a bad form to bring in law enforcement to this meeting.
[3:03:53] I want to take issue with a district two exclusion for outdoor cultivation on any acreages less than five acres.
[3:04:02] I want the board again to remove that district two outdoor restriction.
[3:04:07] I know why it's there, and it's not fair.
[3:04:11] I have seen what happens when people are forced to grow indoors.
[3:04:16] There were double structure fires in my neighborhood because of that indoor growing.
[3:04:21] Indoor growing even in a greenhouse as plastic hoop house requires ventilation.
[3:04:26] That increases energy use, that increases a plastic pollution demand to create a hoop house even.
[3:04:35] And it increases costs for those who are low income and just trying to grow their own medicine.
[3:04:42] And that's the bottom line here. This is medicine for many, many people as you have heard.
[3:04:47] It also increases the fire risk for the outdoor areas that are being forced to grow indoors due to poor wiring.
[3:04:56] This is a very high tax on an industry who has come forward and willingly cooperate with you, with a C4.
[3:05:03] They have so much, they've come to you and asked to cooperate and you're penalizing them with a tax.
[3:05:09] Supervisor Leopold, I want to thank you for your good words.
[3:05:12] The county is being greedy with this high tax.
[3:05:15] I would like a 1% tax, get these people in, gain their trust, and reward them for the good work that they have done with you.
[3:05:23] So please let the Veterans Alliance in on phase one.
[3:05:27] You've heard why, and there is a definitely need if you do a cost benefit analysis.
[3:05:32] Thank you.
[3:05:42] Hi.
[3:05:43] My name is Julia Giddinsky.
[3:05:44] I'm a long-term resident of Bonnie Dune, I've spoken here two several times.
[3:05:50] Today I want to address the issue of personal grows and why I think it is actually very critical
[3:05:54] that they'd be regulated, and it's primarily due to the current reality and history of diffuse
[3:06:01] growing in this county. According to the numbers in the memo for today's agenda item 951 people
[3:06:08] began the registration process for legal permits to grow 760 completed them. And according
[3:06:15] to my conversations with Mr. Peterson, only about 300 to 350 people will be allowed to have
[3:06:22] legal permits to grow in this county if something like 7.128 is passed. That leaves some
[3:06:30] Somewhere in the neighborhood of 500 plus or minus 100 people who want to grow cannabis in this county may indeed already be growing cannabis in this county without a legal outlet to do so.
[3:06:42] So to think that personal grows are not going to be pressured and abused by such a large body of people who want to grow a very valuable crop, I think it's extremely unrealistic.
[3:06:54] And I think it is absolutely critical that personal grows be regulated and that it would be done so in a very clear manner.
[3:07:03] And to that end, I think the regulations that Mr. Peterson has put forward are very reasonable, especially the one grow per parcel.
[3:07:12] And I also think that the indoor grow only is very important because it's enforceable.
[3:07:18] And none of these regulations are going to mean anything if they're not enforced.
[3:07:21] and personal grows are going to be extremely difficult to enforce, especially since we know
[3:07:27] the pattern of diffuse growing throughout the county. So, the other point I want to
[3:07:33] make is to the degree that personal grows are abused. They will be undercutting the
[3:07:37] growers that are coming into the legal system and are paying the taxes. So, thank you.
[3:07:42] Thanks.
[3:07:46] Good afternoon. Good afternoon. My name is Shabba Calintari Johnson and I'm a member
[3:07:51] of community prevention partners, a drug and alcohol prevention coalition.
[3:07:56] Thank you to the board and the staff for the tremendous work that you've done and really
[3:08:00] listening to and integrating the various perspectives that are part of this complex
[3:08:05] issue.
[3:08:06] I'm here to talk about part of the prevention and public health perspective, just a few
[3:08:11] points.
[3:08:13] To reiterate Ms. Kudinsky's points, we also believe that personal growth, there is a potential
[3:08:20] for misuse of personal grows and for them to turn into a black market in which young people
[3:08:25] can access recreational cannabis so that we hope that there is some sort of oversight and regulation
[3:08:30] on personal grows. We hope that the board and staff will keep in mind the lessons learned from
[3:08:39] alcohol and tobacco when we're talking about manufacturing and when we're talking about advertisement
[3:08:44] and potentially loosening the restrictions on advertisement. Two other pieces in manufacturing
[3:08:49] We'd like the board to consider restrictions on products that resemble cartoon characters,
[3:08:56] animals, things that would be attractive to young people, and also restrictions on packaging
[3:09:00] that appeal to youth.
[3:09:02] And final point is the CBP and our advocacy, our prevention advocacy groups, really support
[3:09:10] businesses and programs that put into place compassionate programs such as the Veterans Alliance.
[3:09:16] We hope that the Board will allow for an opportunity for the Veterans Alliance to obtain licensing and to implement their programs, and we hope that the Board will look at ways of incentivizing compassionate programs for other cannabis businesses.
[3:09:31] Thank you.
[3:09:32] Thank you.
[3:09:38] Good afternoon, Dr. Andy Hospitaler.
[3:09:40] Long term resident of the first district and also have a registered cultivation site in the second district.
[3:09:47] I work up at UC Santa Cruz, I run a center for the National Science Foundation.
[3:09:51] Recently, it was qualified as a court expert witness by the federal and the state of California in Metacannabis.
[3:09:58] I want to thank Dan Peterson's office for pulling it together and getting us some regulation that we can work with.
[3:10:04] This is a big step, so thank you very much.
[3:10:06] I'm here to talk about two things I want to comment on.
[3:10:09] First of all, what I call explosive solvents.
[3:10:12] an explosive solvent, specifically, or isopropane and butane.
[3:10:16] There are currently no sources of medical grade butane, sold within Santa Cruz County.
[3:10:22] So any butane that's used for processing is being transported into Santa Cruz County, which is automatically a hazard.
[3:10:28] In my personal scientific opinion and my professional opinion, there's no reason to use butane to process cannabis.
[3:10:36] Well, that's fun.
[3:10:40] And isopropane, there is no medical grade of isopropane that should be used to process.
[3:10:44] So there's no reason to use these gases.
[3:10:46] We can do better using alkanes, alcohols, and CO2.
[3:10:51] The second comment I have is today we learned that somewhere between $3.2 million and $10 million
[3:10:56] of tax revenue is expected from cannabis tax.
[3:11:00] And my understanding is the majority of that is going into enforcement.
[3:11:05] I'd like to suggest to the county that we could return some of that to the benefit
[3:11:09] of the community by allowing it to be spent on research and development,
[3:11:13] to do studies for our own residents that would benefit them that have pancreatic cancer,
[3:11:18] that have PTSD, and do this locally at the Santa Cruz level.
[3:11:22] Certainly, we're not talking about a billion-dollar drug trial.
[3:11:25] We're talking about something that can be done very simply here.
[3:11:27] In the past, they did one in 2014 for pancreatic cancer, and in 2015, for REM behavioral sleep disorder associated with Parkinson's disease, I'd be happy to do that as well.
[3:11:39] Thank you so much.
[3:11:39] Thank you.
[3:11:44] Good afternoon, Supervisor.
[3:11:45] It's Colin Dishirune.
[3:11:47] I'm a board member of the Association for Standardized Cannabis and the Executive Director of Santa Cruz Naturals, and I have been working in the cannabis industry for quite some time.
[3:11:57] And I also have a degree in resource and park management.
[3:12:01] And I, having grown up in a very Republican household and diverting towards the democratic
[3:12:10] side of things, when I opened Santa Cruz Naturals, my dad told me that doing so was one of
[3:12:15] the most Republican things I could have done.
[3:12:18] And in doing so, one of the Republican viewpoints that I have been sharing is the reduction
[3:12:27] in taxes, as associated with cannabis industry, and that being said, I believe that by lowering
[3:12:35] taxes, and this is as we've seen in Oregon and Washington and Colorado, we are going
[3:12:42] to see an increase in revenue coming into the county. And that's because it's going
[3:12:47] to bolster businesses. And right now, what we're seeing obviously is this high tax rate
[3:12:53] is scaring a lot of people away. So I would encourage you to really consider lowering the tax significantly and increasing the amount of businesses that are going to be generating tax revenue.
[3:13:06] That's one. The other thing that I want to talk about today is the special conditions that the second district have with regard to cultivation.
[3:13:16] I believe that there are good intentions behind it, but there are unintended consequences
[3:13:22] that are going to be a result.
[3:13:24] One of those really important unintended consequences is going to be the continued
[3:13:28] environmental impact that's going to be caused by people who cannot bring their cultivation
[3:13:33] sites up to code, and they're going to be dodging the system and continuing to do their operations
[3:13:40] as it is.
[3:13:41] That's going to lead to increased code enforcement, increased law enforcement, and increased environmental impact.
[3:13:46] And the last thing that I want to add is that there will be an increase in buildings that are going to be vacant in five years when the cannabis industry crashes.
[3:13:55] Thank you.
[3:14:00] Good afternoon.
[3:14:01] Good afternoon, board and staff.
[3:14:02] My name is Bryce Barriessa.
[3:14:04] I'm a local dispensary operator and cannabis business owner in the county.
[3:14:07] I'm familiar with all of you and first off, I want to say thank you for all of the time we've put in over the years to get to this point.
[3:14:13] Our joke at the ASC has always been that we try to get you to treat us like every other business.
[3:14:17] So as soon as you do, we can then lobby against all the regulation.
[3:14:20] So we're almost to that point.
[3:14:22] So in spirit of that, I would like to lobby against taxes.
[3:14:26] Your board passed or the voters passed a tax measure in November that allows your board to lower or raise the taxes as you see fit.
[3:14:33] I'm here to encourage you today to take a little bit of leap of faith in the betterment of not only the industry but the county of Santa Cruz and lower the taxes.
[3:14:40] The RCSC put out a terrific letter that I hope you all had the opportunity to read, advocating
[3:14:45] to lower it to 5% across the board for now, get some data, see the revenue come in.
[3:14:50] I signed on for both of my businesses to that letter, although I believe that the tax rate
[3:14:55] for manufacturing should be quite a bit lower to that than that, but I think it's a great
[3:14:58] start.
[3:14:59] I wish I was-
[3:15:00] I was coming to you in a position of strength saying, look at all of us that have come and paid taxes and the floodgates have opened since November. Unfortunately, that's not the case, which makes us a little bit of a one-sided argument. But what I can guarantee you is that we have a wonderful, deep robust, innovative creator of jobs and wonderful products in the Santa Cruz community. And I think that given them a little care, it would very much help them feel solidified as we're going through this process to develop manufacturing ordinances. And I encourage everyone behind me to step up to the bat and spread the word.
[3:15:29] like wildfire to have people get in and start paying those taxes.
[3:15:32] And I think that you're going to get a lot of buy-in and a lot of appreciation and more importantly you're going to get a lot of really well-established, well-intentioned businesses that are here currently that employ hundreds of people throughout the county to stay here, because it's 7% especially for manufacturing where we have to compete across the state unlike the dispensaries where we're only competing with 13 others, 7% the de facto ban, we can't afford to do business, we have the highest operating cost of any segment in the industry for manufacturing.
[3:15:57] And we're one of the greatest employers and I think it's really important to protect the manufacturing community and a little gesture would go a long way.
[3:16:04] Thank you.
[3:16:10] Hello, Pat Mello, lifetime resident.
[3:16:13] I say I'm only hoping to be able to continue to live here in the future.
[3:16:18] So I'd like to thank the board for including a lot of issues that we need to get to, or the staff and
[3:16:26] Dan Peterson, including all the issues we need to get moving on.
[3:16:30] I like that we have the beginnings of the manufacturing draft.
[3:16:34] I like that we're starting a conversation about taxes and what they need to be for us to go forward.
[3:16:42] I really like that the EIR process has been open to the public.
[3:16:48] We had a wonderful meeting last night.
[3:16:50] And just a comment on an insight that I kind of was thinking about at the EIR yesterday is that
[3:16:55] We might have one of the first EIRs in history where the less or the more permissive
[3:17:01] option has less environmental impact than the more conservative option or the draft
[3:17:07] board, and that's for a very unique situation.
[3:17:10] It's because that the more people that we include in this new thing called regulated
[3:17:16] cannabis, the less people that are going to be excluded.
[3:17:20] And we've heard from the lab, from individual after individual saying how their gardening situation,
[3:17:27] their manufacturing situation, is not going to work under this new ordinance.
[3:17:32] And more often than not, those are the smaller producers, those are the ones who have the least ability to move.
[3:17:38] And so, John, you had a good statement about the tax revenue and we don't have time to get into that with other things.
[3:17:47] But, you know, we can either get this whole system right, be inclusive, capture the tax revenue or we can capture the cultivators.
[3:17:55] And let me remind everyone that in Trump's America, in Santa Cruz County, capturing anyone has become unacceptable.
[3:18:03] So, thank you.
[3:18:11] Charlie Smith, I also came to talk about inclusion.
[3:18:14] I talked once before here, your CA regulations allows a one acre, but your RA says five acres.
[3:18:23] I ask again, why five acres?
[3:18:27] How many parcels in the RA areas are five acres?
[3:18:30] You're excluding the smaller and middle size people.
[3:18:34] I mean, if you make it one acre, if you make it two acres, that I can supplement my income
[3:18:40] as a retiree, I really don't want to rent a room out.
[3:18:43] On Airbnb, you're picking your pockets of your constituents by having such a high
[3:18:50] level of regulation.
[3:18:52] It is unnecessary, by the way, it's just a draft for that size right now, correct?
[3:18:57] Well, that how can he threaten that my anonymous license would go away in June when
[3:19:04] that acreage has not been finalized?
[3:19:06] I'm sure you could appreciate it if I find that offensive.
[3:19:08] In any case, I ask again that you reconsider the RA designation so that more people can
[3:19:16] be included.
[3:19:18] Another option in that RA designation, I have a wife and two adult children over 25 on
[3:19:23] my parcel, would be four grow areas, but your new one says it only one grow area on that
[3:19:29] parcel.
[3:19:30] Again, that's restricting what I think is my freedom and rights.
[3:19:34] Thank you very much.
[3:19:35] Thank you.
[3:19:40] If they everyone, cricket here, wants to be know who I am, I have a couple thoughts.
[3:19:46] One is multiple licensing to be able to be grouped together as a way of consolidating
[3:19:54] for the cannabis cultivation side of it.
[3:19:57] And this is the final thought I was thinking about how we have a pre-registration situation
[3:20:03] for cultivation.
[3:20:04] I was thinking that maybe it might be a good idea to do that for manufacturing.
[3:20:08] So we could get a feel for who's here and who wants to participate.
[3:20:13] So I thought this would be a great opportunity to plant that seed with all of you.
[3:20:16] Thank you.
[3:20:17] Thank you.
[3:20:21] Last chance for any public comment.
[3:20:25] I'll bring it back to our board for discussion and bottle action.
[3:20:30] Supervisor Caput.
[3:20:35] I'll go through this quick because I know people have been waiting a long time.
[3:20:40] applications I noticed was about 81 in District 4. It looks like about 81. Who has
[3:20:49] send runs of valley? It looks like 188. I mean, that's a lot. Is that your area? Okay.
[3:20:59] If I had an 188, I don't think I'd be going along with this, but I was worried about
[3:21:06] too much going into District 4. It looks like it's not going to be that way. I calculated
[3:21:12] it out to about 9 and a quarter percent for cultivation. It would be in District 4.
[3:21:20] Anyway, I'm the guy that was in the beginning for compassionate use and medical marijuana
[3:21:27] grows and all that. I voted against recreational use. I think it's a mistake, but anyway,
[3:21:34] way we had the vote in California at past and so what I'm getting at is I'm a reluctant
[3:21:42] participant in this process right now and recreational I believe in my opinion is taken
[3:21:50] it now from compassionate to money. It's becoming a big money generator. I'm not I'm sure the
[3:21:58] the only supervisor that's been asked on a number of occasions by constituents and people
[3:22:05] saying, well, once you get to marijuana tax, you can fix up all these potholes.
[3:22:11] Once you get the tax, you can start working on that levy and getting it all done.
[3:22:18] It's almost become like this, or even a non-profit said, hey, how about give it some money for
[3:22:26] are not profit. It's serious business when we get into recreational use and all that.
[3:22:35] The marijuana I've been told today is from 50 times to 100 times stronger, more refined
[3:22:42] than the marijuana of the 1960s. So there's a tipping point there how careful people have
[3:22:50] to be and how prevalent it'll become in the society.
[3:22:56] So we do have to be careful in going through this whole process, very serious.
[3:23:06] The big thing for me is protecting the environment.
[3:23:12] We're here, we're at where we are now, in my opinion, because of the failure to be able
[3:23:18] to regulate and actually be able to control illegal growing anyway.
[3:23:25] It's just what is happening, destroying the environment.
[3:23:29] And if we can get this cooperation of the growers, public safety, to actually make sure
[3:23:38] that who is growing it has got permits, got a license, we're going to do a lot to protect
[3:23:45] the environment in our county so it's something we do have to be careful about and I don't want
[3:23:56] to see money take this over and become a type of greed where if we tax enough we're going to get
[3:24:06] money and we're going to have money for all kinds of government programs and giving raises to people
[3:24:14] at the top or whatever. That's not my motivation. My motivation is the environment being protected,
[3:24:25] also looking out for neighbors that are living next door to people that are going to do the growing,
[3:24:30] and also that, of course, compassionate youths for people that do need marijuana,
[3:24:37] or it's probably less toxic to their system than a lot of other drugs that they are taking.
[3:24:43] So the other last thing I'll say is, if the Veterans, Santa Cruz Veterans Alliance is not included, I may change how I'm leaning in May.
[3:24:59] Okay, so anyway, I'm going along with this today, but I'm going to look real close on what's happening with veterans out there and make sure they're included in the May review.
[3:25:12] Thank you.
[3:25:12] Thank you.
[3:25:13] Supervisor McPherson.
[3:25:14] Thank you, Mr. Chair.
[3:25:17] I'm proud to be a representative of the Fifth District that includes the Santa
[3:25:20] Ones of Alley.
[3:25:24] But I do want to accept the recommendations that have been presented.
[3:25:30] And I want to thank our Dan Peterson for the excellent job.
[3:25:34] He's had a short window to get this together and to add that he's done that because
[3:25:41] of the cooperation with many of you who have spoken today.
[3:25:44] So I do appreciate that.
[3:25:45] I think we are moving in the right direction.
[3:25:48] And I would like, I would be supportive of the recommended actions here.
[3:25:54] I do think that the tax structure issue is going to be one that we're going to have
[3:25:58] to have particular attention to.
[3:26:01] And maybe it will be something when we come to budget sessions that we do something
[3:26:06] that goes through this calendar year, but changes in year 2018.
[3:26:11] I'm not sure how we'll work that out.
[3:26:13] That's going to be extremely a lot of discussions
[3:26:15] and what, if it's manufacturing, cultivation and so forth,
[3:26:19] and if there can be adjustments on percentages of each of those.
[3:26:24] I mean, I'm open to listening to that.
[3:26:27] I have listened to some of that from some of you,
[3:26:30] but I'm ready to just follow the recommended actions
[3:26:32] and I agree that the Veterans Alliance
[3:26:37] out of receipts and consideration as well.
[3:26:44] So I just had a couple quick questions based off public comment.
[3:26:47] The first was a question around limits on packaging and advertising.
[3:26:51] I know that it's a fine line with first amendment,
[3:26:54] but are you looking at that?
[3:26:57] Yes, we are, but at the moment,
[3:26:59] Auma also includes provisions as to what is allowed
[3:27:02] for packaging and advertising.
[3:27:04] So we will be following the statement requirements very, very closely.
[3:27:08] Does that preemptus?
[3:27:10] No, it does not preemptus.
[3:27:11] We can be more restrictive, but we can't be less restrictive.
[3:27:14] Okay.
[3:27:15] Second, do you, you had mentioned that you meant to include M1 as a potential area for manufacturing?
[3:27:22] Do you need direction on that or is that just part of what you're going to be doing?
[3:27:26] Well, I obviously appreciate all direction that I received.
[3:27:30] But at this point, that's my intent.
[3:27:33] The second thing was brought up around butane and isopropane, and whether I assume you'll
[3:27:42] be looking at those particular materials in more detail?
[3:27:45] Absolutely.
[3:27:47] And I'm ready to make a motion which is to move the staff recommendation with the additional
[3:27:54] direction that on personal growth, ancillary structures is defined as to include backyard
[3:28:00] are greenhouses, including kid or pre-fabricated greenhouses, that staff return to us on April 11th with a process for the Santa Cruz Veterans Alliance to apply for a dispensary license, and that staff report back to the board in August with a report on taxes that addresses some questions I passed out, and I just gave it to my fellow board members.
[3:28:22] I'll read in the record and share it to you, but from a tax perspective, this is what I need to know, and I'll say parenthetically
[3:28:30] that the hotel industry could fill this room and say we could make a lot more money if
[3:28:35] we lowered the TOT and I hear every day that if we lowered our sales tax which in Watsonville
[3:28:40] and Santa Cruz is one of the highest in the states, we'd be more competitive and it's
[3:28:45] hurting family owned businesses and some of those arguments are good and some of those
[3:28:49] arguments I don't entirely agree with but we try to base it on data and what we can see
[3:28:56] from the numbers and I think we need to do the same thing with this tax.
[3:29:00] And so the questions I have that I'm looking forward to getting answered are what percentage of cannabis and
[3:29:05] registrants estimate what is a percentage of cannabis and
[3:29:10] registrants estimated there will be subject to the 777 compound attack Santa Cruz County.
[3:29:16] What is the estimate for how much cannabis is cultivated, manufactured, and or sold locally?
[3:29:21] How much are Santa Cruz County dispensary sales from cannabis that are cultivated themselves?
[3:29:25] And therefore not subject to the compound attacks rate?
[3:29:28] How many cultivators will also manufacture products and therefore not be subjected to the compounded tax rate?
[3:29:36] How many tax paying cultivators do we have?
[3:29:38] How many cultivators and manufacturers will end up getting state licenses?
[3:29:41] Has the current tax rate to press sales at Santa Cruz County's dispensaries?
[3:29:46] What's the evidence of this?
[3:29:48] What are the percentage of cannabis products?
[3:29:50] What percentage of cannabis products overall costs are from taxes versus land, labor, and
[3:29:55] other costs, and for each sector, and what are the predictions for growth in the records?
[3:30:05] I think we can come back and set up tax rate. Again, I think all our goals are the same, right? We want to foster a good local industry that maximizes a sale to get the maximum tax rate. But we want to make sure we set that right. And because we're an, essentially, an exporting county, we're bearing a lot of costs of cannabis that then get it.
[3:30:28] gets exported to other places and tax other places.
[3:30:31] And so how do we recover some of those costs going forward?
[3:30:34] And just to go off public comment, my anticipation is that we not spend all this money on
[3:30:40] enforcement, my anticipation, so we spend this on mental health policies and youth programs.
[3:30:48] We offset some of the amazing cuts that will be coming to us from the federal government.
[3:30:54] And so, so it's very important to me that we hit these numbers because these are
[3:30:58] lives that we're going to invest.
[3:31:01] We're going to help serve by, with this, with these dollars.
[3:31:08] So, somewhere at the beginning of that, there was a motion.
[3:31:12] And somewhere at the end of that, I'll second it.
[3:31:15] Is our clerk aware what the motion is?
[3:31:18] So, maybe it could be clearly restated.
[3:31:21] Okay. Maybe, well, the clerk gets that I could just go ahead and jump in because I think
[3:31:26] there are a couple of other recommendations that your board will let the land hold
[3:31:31] on right there.
[3:31:32] Okay.
[3:31:32] Just hold it.
[3:31:33] Maybe, if you haven't written down, could we just read it in so we're clear what the motion
[3:31:38] is?
[3:31:39] So I'll read it, which is to adopt staff's recommendations and also the additional
[3:31:45] direction that personal grows include ancillary structures that the staff return
[3:31:49] to us on April 11th with a process for the Santa Cruz Veterans Alliance, and that,
[3:31:55] when the staff reports back to us in August, on taxes that they address, the questions
[3:32:00] that I just read.
[3:32:02] And we'll hand it on to the board.
[3:32:03] So is that clear for the seconder?
[3:32:06] Yes, sir.
[3:32:06] And just for the audience knows, Susan Galloway is our clerk of the board, and she has the
[3:32:11] very unhappy job of trying to transfer what we say up here in long sentences.
[3:32:18] There's something short that can be put in the minute, so thank her if we get it right.
[3:32:22] Or if she gets it right, we look good.
[3:32:26] Supervisor Friend, do you have any more?
[3:32:27] Just briefly, I just wanted to congratulate Colin Dishroon on coming full circle to believe in
[3:32:32] ergonomics. You're doubt to be really proud.
[3:32:36] Triple down apparently works in your industry too.
[3:32:38] But anyway, I appreciate that everybody has stuck it through this long.
[3:32:42] We are getting closer and closer to something as both the state and federal landscapes shift and
[3:32:48] And I appreciate, I fully agree with Supervisor Coonerty's questions, the component on taxation is important,
[3:32:55] but we can't be arbitrarily saying any number, right?
[3:32:59] I mean, right now we're, we're set at a number, but just as some are saying it could be too high, without
[3:33:03] information, we don't know where too low is either.
[3:33:06] We actually need to have a sense through this analysis to really have a sense of how many people
[3:33:10] had impacts and what that would mean for us on the mitigations that we promised.
[3:33:14] Remember, we went to the voters twice and associated with that, we made commitments to
[3:33:18] than that this was associated with mitigating impacts and also providing services for the community in order to have this industry exist and come into the light within Santa Cruz County.
[3:33:27] We have to recognize that the voters overwhelmingly agreed with that and asked us to do exactly what we're doing right now.
[3:33:33] And so therefore I think it's reasonable for us to take a solid look at what that number should be because the voters asked us to do exactly that.
[3:33:40] We committed to them that we'd be providing services associated with this.
[3:33:43] We provided to them that we would also be mitigating impacts.
[3:33:46] That's what we need to be doing, so thank you.
[3:33:49] I know our CAO is concerned about all the other aspects of the recommended actions that may have not have been captured in the original motion.
[3:33:58] Yes, I just wanted to remind you that Supervisor Friend did ask us to assure that both CA and AUses, especially in the coastal zone, do not promote the development of structures on agglans for manufacturing, paying careful attention to the definition of ancillary use.
[3:34:13] So, is that intended to be included in the motion?
[3:34:16] Well, let me say that I believe that the board had already provided that direction.
[3:34:19] The EIR regarding the coastal zone, my statement was by way of extension, this language was vague
[3:34:24] and didn't say anything in general regarding the CA.
[3:34:27] And I thought that was already sort of decided for the coastal zone as far as the EIR went.
[3:34:31] So, I didn't know if you needed that as a formal element as part of the direction.
[3:34:36] I just wanted to make sure that we don't know.
[3:34:37] We'll make sure it's in there.
[3:34:38] We just wanted to make sure you didn't want to include it in your direction at this time.
[3:34:42] So when you're sure it's in there, and then Supervisor Leopold had asked for further review of the indoor and outdoor provisions
[3:34:49] and the manufacturing ordinance, I believe it was-
[3:34:52] No, it was in the personal cultivation.
[3:34:54] And you also-
[3:34:54] Oh, also in the manufacturing.
[3:34:56] Right, you asked for both.
[3:34:58] And we talked about advertising requirements.
[3:35:01] I don't know if there's any additional direction with regard to advertising requirements,
[3:35:06] the flexibility for discretion for the licensing officer and the request for mapping.
[3:35:10] So those were the other items you mentioned.
[3:35:12] If you'd like to include those, we'd be happy to do so.
[3:35:16] Yes, I mean, I think that's, I think you were trying to get some sense of direction.
[3:35:19] I didn't hear anybody speak out against those very issues and so-
[3:35:23] Whether it needs to be a part of the minutes of mean motion, I'll leave to someone else.
[3:35:29] Okay.
[3:35:30] I do want to make a couple of remarks.
[3:35:32] First of all, I want to thank everyone for coming here today and I really appreciate the hard work
[3:35:37] that Mr. Peterson and his staff have put into getting us to where we are today.
[3:35:44] Five months is not a long time, but you've shown that you've been able to advance a lot more
[3:35:48] than we have as a board in six years.
[3:35:52] So thank you for that.
[3:35:53] And you're actually putting sort of meat on the bones of what we're trying to create here.
[3:35:59] And that's not easy.
[3:36:01] It's not easy here in Santa Cruz.
[3:36:02] It's not easy in California.
[3:36:03] It's not easy in this country because of the weird way in which we are doing rulemaking
[3:36:09] and laws, and for us to be able to come up with good information using real data, I support
[3:36:16] that, and I appreciate what you've been able to do.
[3:36:21] I think on this issue of the taxes, we did make assertions to the public, but we also don't
[3:36:31] have, there wasn't a debate about 7% or 5% or 10% in there.
[3:36:36] We gave ourselves the ability to move this by a majority vote of this board.
[3:36:41] And what we're left with is we will, if we wait till August to decide what the tax rate
[3:36:48] should be in 2017, we will have, with the de facto saying it's 777.
[3:36:55] So I think that's, I think we need to come back sooner than that to look at the tax rate
[3:37:00] for this year, and if the staff is unwilling, maybe there are board members who would be willing
[3:37:06] to work and make a suggestion so we could actually have a meaningful discussion.
[3:37:09] I don't think it's agendized today, whether we could have that discussion today or not.
[3:37:15] So that should come back to us, at least to have that discussion, because data makes a difference.
[3:37:21] But we're not going to have enough, as one speaker pointed out, we only have one data
[3:37:25] point.
[3:37:25] It's not a meaningful amount of data, and we're really looking about some policy goals, in my opinion,
[3:37:33] rather than what kind of information we've gotten from a couple of months of activity.
[3:37:38] I will point also out to my colleague that the hotel industry did come into this room and
[3:37:44] did get us to reduce taxes after they brought a lot of people.
[3:37:47] So we had a proposal to move the TOT up to 12% and they came and they threatened us and this board back down.
[3:38:02] So that's not a good model for us to use and we shouldn't have to get me in that kind of confrontation, especially with people who want to work with us.
[3:38:10] The city sales taxes are different because people are asked to increase their sales tax
[3:38:16] in order to get something, and the city of Santa Cruz, the city of Watsonville, public safety
[3:38:20] roads, a whole bunch of other pieces.
[3:38:23] That's what communities should do, and they should ask what they want to do to invest in themselves.
[3:38:28] So those high tax rates are because the communities have chosen to invest in themselves, and I applaud
[3:38:35] those efforts. But it can't be used to say, well, now we want to lower the taxes
[3:38:42] because you went out to the public, you asked them, and they agreed. This is slightly different
[3:38:47] because we basically asked people to give us the ability to go up to a limit. But one could make an argument
[3:38:55] that they gave us the prerogative to make reasonable choices that would reflect the goals that we identified
[3:39:02] in the measure. So I want to do this through collaboration rather than
[3:39:09] confrontation. And I think there's an opportunity to do that. I think we should do
[3:39:16] that and hopefully we'll be able to get to that in a different meeting.
[3:39:21] You know, several people brought up their concerns about what they wanted to see
[3:39:23] in the cultivation ordinance. That's actually not what's on our agenda today. We do,
[3:39:28] we've had a very involved discussion about that. That's why we're doing this
[3:39:31] environmental impact report, as it was discussed, that will come back to us in a first iteration
[3:39:38] at the beginning of June. We'll have a study session on that. We'll talk about what's in the EIR,
[3:39:44] not what it's going to be in the ordinance. We're going to talk about the information.
[3:39:49] Then a final EIR will come out and should we certify it, it will be the document that guides
[3:39:55] what the ordinance will look like. So, stay tuned in September or sometime like that, we will actually be adopting an ordinance and we'll be making changes based on real information.
[3:40:08] I think where this process takes a lot of patience as we found, I think we can continue to move forward.
[3:40:18] I think that what's been laid out here for the manufacturing ordinance is a good start and I think with further refinement that we have an opportunity to craft something based on now our lots of experience with cannabis and the active participation of people involved in the industry to make sure we have an ordinance that really works out.
[3:40:37] So I look forward to seeing that final ordinance when it comes back to us in the coming months.
[3:40:43] If there's no more comments, then I will call for a vote on the motion made by Supervisor
[3:40:51] Community Seconded by Supervisor Friend.
[3:40:53] All in favor, signify by saying aye.
[3:40:56] Any opposed, the motion carries unanimously.
[3:41:00] And with that, we will go into closed session.
[3:41:04] We have a 130 item, but we have a number of items in closed session.
[3:41:08] Will we have anything to report out of that closed session?
[3:41:10] There's a chance that one of the items is reportable.
[3:41:12] Okay. Well, I encourage you to go out lunch and if you want to see what happens with our mid-year budget review, come back at 1.30.
[3:41:21] Thank you.
[3:47:59] is considered a mid-year financial update for fiscal year 2016-17 and conduct a study session of the 2017-18 county proposed budget as outlined in the memorandum of the auditor controller, treasurer, tax collector, and county administrative officer. There's an attachment of the ACTTC mid-year report. And I believe Ms. Morello is starting off. Yes, we're just going to I'm just going to turn it over to Edith Triscoll or auditor controller and Carlos Palacio.
[3:48:29] The Assistant County Administrator will be delivering today's report, close.
[3:48:35] Good afternoon.
[3:48:37] Good afternoon.
[3:48:39] First, we have the agenda for today.
[3:48:42] Auditor control or treasure tax collector will be giving her mid-year report.
[3:48:46] Following that, I'll be giving an overview of the budget at mid-year,
[3:48:51] followed by a preview of some initiatives that we are proposing to include in the budget this year.
[3:48:57] After that, we will have department overviews that include the major emerging issues that they are facing.
[3:49:03] There will be five departments that will be speaking.
[3:49:06] Public works will come up first, then we'll have our public safety, the sheriff, and county fire, and then we'll have health and human services finally.
[3:49:16] And then at the very end, I'll come up and give a summary of next year's challenges and also a preview of next year's budget as well.
[3:49:25] And so following that, we'll go ahead and start.
[3:49:30] Good afternoon, Chair Leopold and members of the Board.
[3:49:33] I'm not sure your back of photos on.
[3:49:35] The green light is on.
[3:49:36] All right.
[3:49:37] I need to put some of the photos on.
[3:49:38] Point it at you.
[3:49:40] All right, I'll start again.
[3:49:42] Good afternoon, Chair Leopold and members of the Board.
[3:49:45] As previously introduced, Edith Triscoll, out of her controller,
[3:49:48] Treasurer Tax Collector for the County of Santa Cruz.
[3:49:51] I'm pleased to provide the Board and the County staff
[3:49:53] with the mid-year financial update for the fiscal year 2016-17.
[3:49:58] In your board's agenda packet you have my mid-year report, this afternoon I'll be highlighting
[3:50:03] that report using some PowerPoint slides.
[3:50:08] I'm beginning today with an overview of the entire budget that your board originally approved
[3:50:12] for the 2016-17 fiscal year.
[3:50:16] The budget presented here is broken down by categories of funds, so we'll discuss each
[3:50:21] category briefly. The general fund, which is budgeted at $400 million, $480 million, you're
[3:50:27] very familiar with as it's frequently discussed here at your board. The special revenue funds
[3:50:33] budgeted at $65 million include housing funds, park identification funds, and the road fund.
[3:50:39] Special district funds budgeted at $50 million are the county service areas including
[3:50:44] providing CSA 48 county fire protection and many of your flood control districts.
[3:50:50] The 96 million budgeted in internal service funds includes the Public Works Department,
[3:50:56] information services department, and the various insurance funds including workers' compensation
[3:51:01] and unemployment insurance.
[3:51:04] And finally, the enterprise fund budgeted at 20 million is related to CSA 9C, the county
[3:51:10] disposal site, and Davenport in Freedom Sanitation, and a few of the other sanitation-related funds.
[3:51:18] The total comes to $711 million as presented here.
[3:51:23] And I seem to have lost an additional slide, but I did want to focus that the county has a strong alliance on federal and state funds, as they make up 41% of that total revenue.
[3:51:33] The total revenue of $711 million.
[3:51:37] There
[3:51:44] we go.
[3:51:46] Continuing to stay focused on the total county revenues, the total county budget, this
[3:51:52] pie chart reflects the sources of total county revenues.
[3:51:56] Intergovernmental revenues are 42%.
[3:51:58] These represent the federal and state funds that I discussed just a moment ago.
[3:52:03] Charges for services and then taxes are the other two large revenue sources.
[3:52:08] I'll go into these in greater detail on further slides in the presentation.
[3:52:22] As you see here, salaries and benefits are the largest expenditure, followed by services and supplies.
[3:52:29] You often hear us refer to the greatest expense of the county as salaries and benefits, and as you see that's 43% if we're looking at the total budget.
[3:52:41] Now onto General Fund revenues.
[3:52:43] The General Fund budget, as we saw in the first slide, is budgeted at $480 million.
[3:52:48] Since the beginning of the year, your board has accepted additional revenue bringing the budget to 481 million.
[3:52:58] For the general fund, federal and state money make up 51%, that's the category listed here as Intergovernmental Aid.
[3:53:05] So more than 50% of your general fund budget is federal and state funds.
[3:53:10] The tax area includes not only property tax but also your TOT and CBT.
[3:53:19] transit occupancy tax and cannabis business tax.
[3:53:28] This slide reflects the status of meeting our general fund revenue budget.
[3:53:33] For the first seven months of the fiscal year, we received 42% of the budgeted amount
[3:53:38] of the total general fund revenues.
[3:53:42] This exceeds receipts received in the comparable period of the prior year when only 38% of
[3:53:48] the budgeted revenues had been received.
[3:53:51] Intergovernmental aid from state and federal government is the largest revenue source for
[3:53:55] the general fund, as I just mentioned.
[3:53:57] To date, 36% of budgeted intergovernmental revenues have been received.
[3:54:02] This exceeds the prior year comparable period of only 32% being received.
[3:54:07] These revenues traditionally lag during the year because they're tied to expenditures, and
[3:54:12] are paid on a reimbursement basis.
[3:54:13] Departments submit to claims, and later in the year or potentially in the following year
[3:54:17] we received those funds.
[3:54:20] These general fund intergovernmental revenues very slightly from the total county revenues
[3:54:24] regarding their fund and state mix, showing that we have a greater reliance on federal
[3:54:29] and state funds for the general fund.
[3:54:33] As of January 31st, 2017, we have received 52 percent of the budgeted amount of total tax
[3:54:38] revenues, which is similar to this time last year when we have received 52 percent.
[3:54:43] This year, the county has received a one-time final clean-up payment in the triple payment—excuse
[3:54:49] me, triple-flip payment—from the state of California in the amount of a million three.
[3:54:54] Detailed receipts of tax revenues are provided on the next slide.
[3:55:02] General fund taxes.
[3:55:04] This graph provides a breakdown of the tax receipts.
[3:55:08] The county contracts with HDO and associates to perform sales tax monitoring and reporting.
[3:55:13] You'll see here that sales tax represents 8% of our budgeted revenues.
[3:55:22] The county, Santa Cruz County saw a decrease of 0.6% over the comparable time period from
[3:55:28] prior year according to HDL's most recent report to us.
[3:55:32] Actual sales activity grew 1.5%, but when reporting abbreviations were factored out, it was reduced to 0.6.
[3:55:41] The central coast region as a whole is up 2.2%.
[3:55:46] Additionally, looking at this slide, you can see property checks is equal 52% of the total revenue brought in, budgeted.
[3:55:59] Comparing these tax revenues for the first seven months of the year to the same seven months of the previous year, you can see our receipts are slightly ahead of where we were.
[3:56:11] And again, you'll notice in the sales tax and new category that reflects the one-year, the one-time payment we received this year, the payoff amount.
[3:56:18] The county's property tax delinquency rate is a key element in highlighting to highlight
[3:56:26] when reviewing property tax revenues.
[3:56:28] For fiscal year, 1516, the rate was 2.3%.
[3:56:32] The delinquency rate has been on decline for several years, which is very important to
[3:56:36] the county.
[3:56:37] Higher delinquency rates create a cash flow issue for the county.
[3:56:41] However, the county does eventually receive the taxes, penalties, and interest when the property
[3:56:45] is sold or brought current.
[3:56:48] San Chris County is on the teeter plan for porting property taxes.
[3:56:52] The teeter plan allows the county to distribute taxes to cities and special districts based
[3:56:57] on their calculated share of the property tax role.
[3:57:01] This allows cities and special districts to rely on a definite amount of tax revenue with
[3:57:06] the county absorbing the risk of delinquencies along with retaining the late penalties and
[3:57:11] delinquency assessments.
[3:57:16] Now we'll switch focus to the general fund expenditures.
[3:57:19] This graph reflects categories of general fund expenditures.
[3:57:23] Sours and benefits are almost 50% of general fund expenses.
[3:57:34] How is the county performing compared to budget regarding expenditures?
[3:57:38] This slide will provide you information for the first seven months of the fiscal year.
[3:57:42] As reflected above, 53% of sours and benefits have been expended,
[3:57:48] which is reasonable at this point in the fiscal year.
[3:57:50] This
[3:57:56] next graph reflects the board's progress towards reaching a 10% general fund reserve goal.
[3:58:02] Your board's fund balance reserve policy strives to reach 10% by 2021.
[3:58:08] The first three years reflected on the left are rates that are reported based on final
[3:58:14] CAFRA amounts. The final calculation on the right is based on the adopted budget.
[3:58:20] The county's reserve policy has helped the county maintain a strong fiscal position
[3:58:24] and whether negative economic trends.
[3:58:32] Having a strong gem of fund benefits the county's ratings
[3:58:35] for borrowing.
[3:58:36] The county maintains both short and long-term ratings
[3:58:38] from standard and poor's and moody's.
[3:58:41] The long-term ratings I'll highlight here,
[3:58:43] I don't have a slide for this.
[3:58:45] Standard and poor's, we currently have a AA negative rating
[3:58:48] and moody's we have an A1.
[3:58:50] In October of 2016, Moody's did a review of our rating
[3:58:55] and upgraded us from an A2 to an A1.
[3:58:58] The
[3:59:02] information I just presented is available on the County Auditor Controller's website.
[3:59:06] Both county budget documents as well as many different annual financial statements
[3:59:11] and the CAFR are shown here on my website and highlighted with the red arrows.
[3:59:18] Additionally, we have a new item we want to highlight and we're shown to you today.
[3:59:22] The Auditor Controller's office is continuing to focus on transparency
[3:59:25] and providing current fiscal information to citizens and staff.
[3:59:29] We're pleased to introduce to you an online financial tool called EasyGov.
[3:59:34] The tool is available here on the site.
[3:59:43] The tool will continue to modify, the county will continue to modify the tool to include
[3:59:48] predefined graphs as users' request things, such as COT or CBT taxes or budget to actual.
[3:59:55] The tool provides data to users in various forms from charts, graphs, or principal reports.
[4:00:00] The users log in and define the type of data they want to receive. Again, budget to actual. Data is updated quarterly. So the benefit of this tool is you'll be able to see how we're doing on a quarterly basis and citizens can access this without needing to do a public records request.
[4:00:21] In summary, general fund revenues are at 42.28% of budget and expenditures are at 49.8% of budget. Current year expenditures are as expected at this point in the fiscal year, although revenues lag behind.
[4:00:34] Both revenues and expenditures are similar to last year at this seven-month period.
[4:00:39] Property tax delinquencies remain stable.
[4:00:42] Care must be taken in the upcoming budget year to ensure that expenditures do not outpace
[4:00:46] revenues, and that fund balance amounts continue to follow the county policy.
[4:00:52] Thank you for providing me with the opportunity to present this report.
[4:00:56] I'm going to see if Board members have any questions about this report.
[4:01:00] Or you may want to consider listening to the CEO's presentation and combining your questions,
[4:01:06] whichever you prefer.
[4:01:07] Let's just see if anybody has any quick question.
[4:01:10] A brief one.
[4:01:11] Under the general fund expenditure, expenditures, there's a 15 percent pi called other charges.
[4:01:16] You didn't say what that is.
[4:01:17] Can you just give me a sort of a highlight of what would make up one seventh of that of our total pi here?
[4:01:23] So you have salaries and benefits, services, and plies, I get that.
[4:01:25] Other charges.
[4:01:30] I am going to take input from the CAOs.
[4:01:33] It includes a lot of contracts and contract payments like menu programs, things like that.
[4:01:38] I believe that's also where we reflect some of the debt service payments and the like, but I'm not sure.
[4:01:44] You can just give that information to me later, that would be happy to.
[4:01:46] Thank you.
[4:01:47] I also just one quick question.
[4:01:50] You mentioned that this year was the last year of the triple-flip pay.
[4:01:54] Correct.
[4:01:56] Those were funds that the state owed us it hadn't paid.
[4:02:00] Correct.
[4:02:01] Did they still owe us any more money?
[4:02:05] No.
[4:02:06] Right, that was the true up.
[4:02:07] Yeah, that was the true up.
[4:02:09] It was the final payment.
[4:02:09] That was the final payment.
[4:02:10] All right, well then let's continue Mr. Flosios.
[4:02:24] OK.
[4:02:26] Looking at the mid-year budget, and this
[4:02:29] is going to sound strange given all the things
[4:02:31] that we're facing at the state and national level at this time
[4:02:34] and given all the storm impacts. Right now we are actually doing pretty good, and that's
[4:02:39] a testament to a few things. One is that our revenue growth has been modest, but it
[4:02:46] has been steady. And the other factors that we have been vigilant in controlling our expenditures,
[4:02:54] and therefore our revenue growth has been able to keep pace with our expenditures, and in
[4:03:00] even surpassed that. And so that's all good news. And I think the board deserves a lot of credit for that
[4:03:09] for maintaining our expenditures in a way that is
[4:03:13] below our revenue growth. Now the danger that is that we are facing
[4:03:21] some storm clouds on the horizon. And we know that these are very serious
[4:03:27] challenges that await us in the future.
[4:03:30] One is that the economic recovery that we are currently in is slowing.
[4:03:36] We know that the state budget contains significant risks for the county and we're going to talk about this later in particular with the in-home supportive services, actions that the governor has taken.
[4:03:47] We know at the federal level that there's lots of movement on the Affordable Care Act, which could have severe ramifications both for our community but also for our budget.
[4:03:56] We know that we have significant deferred maintenance and infrastructure needs, which has been compounded by the storm impacts we've had it to our roads.
[4:04:06] And so those three things, state issues, federal issues, are storm impacts, and then a possible economic slowdown in the future all make us a little bit nervous.
[4:04:18] And so that when we want to keep making progress towards our reserves, which your board has done every year.
[4:04:23] And we are on track to reach the 10% goal that your board has set for us.
[4:04:30] So we look at the governor's budget.
[4:04:32] Mainly the governor has emphasized fiscal restraint and being conservative.
[4:04:37] He's emphasizing both strange state reserves, keeping the budget balanced,
[4:04:42] maintaining expenditure control.
[4:04:45] And unfortunately, he also took the action of shifting and
[4:04:51] I don't support services cost to counties.
[4:04:54] We know that he's doing this partly because of a potential coming recession.
[4:05:01] After the great recession which took place in 2008 and
[4:05:05] 2009, we have been in an eight year recovery right now.
[4:05:09] We're in our eight year of recovery since that recession.
[4:05:12] And the average length of a recovery is typically five years.
[4:05:17] So we're three years beyond the average.
[4:05:19] So that makes us nervous a little bit, and I think that makes the governor nervous that we're past due so to speak for a recession, and we have seen that the economy is slowing down somewhat.
[4:05:33] Looking at the economy, unemployment rates are good, this is probably the lowest, I think, since before the great recession.
[4:05:42] You can see in November of 2016, we're 6% unemployment, which is very low for this county.
[4:05:49] It's slightly above California and the national averages, but that's mainly due to the agricultural industry and
[4:05:55] the characteristics of employment in that industry.
[4:05:59] And so we're always going to be a little higher than the state and national averages.
[4:06:02] But it's actually good news in terms of the strength of our economy.
[4:06:07] Looking at the economic forecast, what I would say is that it's modest.
[4:06:12] but positive. That's the good news. It's still moving in a positive direction. It's slowing,
[4:06:17] it's modest, but it's positive. Job growth, less than a percent, but it's growing.
[4:06:23] Saur is expected to increase by about 3% this year. Population under a percent. Real per
[4:06:31] capita income expected to increase by about 3%. And so all of these trends point to modest
[4:06:37] increased in our tax revenue, and our tax revenue for our general fund is very important.
[4:06:44] So if we look at our main primary revenue growth and in particular taxes,
[4:06:51] this is part of the good news that we are now projecting that we will come in about $3.6 million
[4:06:59] ahead of our budget, that's about 3% and we're led by property taxes.
[4:07:05] property taxes still increasing, other taxes slowing a little bit, and you'll note that
[4:07:12] the cannabis tax there is a little bit under what we projected mainly due to the cannabis
[4:07:18] too, cultivation. At this point, we really have seen very little revenue from the cultivation.
[4:07:23] Now, we just don't have data on that. We don't know, I know that we just had that conversation
[4:07:27] with our cannabis licensing official, and it's possible that we could have, it could
[4:07:33] It's going to be very cyclical, right?
[4:07:34] And that could show up and we could meet the budget in the end of the day.
[4:07:38] But right now, it's, we're a little concerned on the lack of registrations and the lack of payments.
[4:07:44] But be that as it may, we're still running positive.
[4:07:49] If you look at our overall general fund budget, you'll see that when, in the left hand column,
[4:07:55] this is 16, 17 budget, you'll see that when we adopted that budget,
[4:07:59] that we had a 8 million, 8.1 million dollar net county cost.
[4:08:03] We've also characterized that in the past as the structural deficit.
[4:08:07] $8 million dollars, while it's significant, and then you have to put it in context.
[4:08:12] If you look at it as a percentage of total expenditures, it's only about 2% of the general fund.
[4:08:19] If you look at it as a percent of departmental net county cost, it's about 6%.
[4:08:24] So it's not huge, but it is, of course, always a concern.
[4:08:28] Although it's very common for counties to have a structural deficit of some kind.
[4:08:32] We've been meeting that structural deficit by fund balance, basically, every year, and that's how we funded this.
[4:08:38] The good news is that we are projecting that we're going to make up that net county cost by both increased general purpose revenues of about $5 million.
[4:08:51] And our departmental net county cost is down by about $3 million, this is the projections.
[4:08:55] And so we basically are projecting that we're eight million dollars to the good so that net county costs and this this current mid year, we're gonna make it up.
[4:09:07] If you look at our department net county costs, it's I think it's an important thing for us to keep in mind.
[4:09:15] We start the budget as our treasure tax collector auditor controller pointed out with over $700 million.
[4:09:26] And then you take out a bunch of the special district and enterprise funds,
[4:09:30] internal service funds and so forth, and you get down to the general fund of about $480 million.
[4:09:35] And then out of that, you take out those expenditures, which are directly related to a revenue production.
[4:09:41] And you get down to the net county cost of about $128 million.
[4:09:46] And that is typically what a board supervisors would say is really what the discretionary nut at the core of the county budget is.
[4:09:55] But then you look at that and you see that over half of that is public protection, so that's to share of the jail, public, the district attorney, probation, so forth.
[4:10:08] And then if you add the health and sanitation and to public assistance and you get to about 17% and so if you add the 17% to the 57%, pretty soon you're at 74% to the budget.
[4:10:23] which is leaves you with a pretty small, truly discretionary amount.
[4:10:30] And then when you look at that discretionary amount, that so-called discretionary amount,
[4:10:33] a lot of it is state mandates, such as our assessor, for example, or
[4:10:36] our auditor controller office, our elections office, and so forth.
[4:10:40] And so that's why even though we have a large budget, over $700 million, our room to maneuver is relatively limited.
[4:10:46] And that's why we try and be very vigilant in watching expenditures.
[4:10:52] I'd like to present to you now a few things that are looking forward towards this year's
[4:10:57] proposed budget that we will be including.
[4:10:59] The first two things will be a new budget and CIP format, that's our capital improvement
[4:11:04] plan.
[4:11:06] And then we will also be proposing three initiatives, strategic planning, performance measurement,
[4:11:13] and continuous process improvement.
[4:11:15] And that would be proposed in the budget and if your board approves them, adopts them, then they would be initiated in the coming fiscal year.
[4:11:25] So let me get in a little bit of detail.
[4:11:28] The budget is really the board's method for setting priorities, for setting its values really.
[4:11:37] It's a most important policy document that you do.
[4:11:41] The other thing that a budget is, is it's a communication document, it's really how we communicate to the public about not only how we spend our money, but what our priorities are.
[4:11:53] And so our staff wanted to do something in terms of making the budget more easily understood.
[4:12:01] We wanted to focus on clarity, consistency, ease of understanding for the public.
[4:12:08] So we looked at pretty much almost every county budget in the state and a lot of city budgets.
[4:12:13] And what we did is we took the best of what we saw.
[4:12:17] We took best practices.
[4:12:18] We thought what are the things that are the best way of presenting information,
[4:12:23] complex information, and incorporated into a template.
[4:12:27] And so this is the preview of what the template will look like in this year's proposed budget.
[4:12:31] It has 12 common elements that will be shared by all departments.
[4:12:37] And we'll be consistent within every department so that hopefully the public will find it easier to understand.
[4:12:45] It'll also, the budget will also be centered on functional groups so that we will take now our budget as opposed to doing it alphabetically.
[4:12:52] We will be doing it by functional groups, for example, health and human services, public safety, planning and
[4:13:01] So we hope that when we come forward on this, that it will be something that your board really enjoys and that the public will enjoy in terms of understanding the budget.
[4:13:10] We also are going to be including a new format for our capital improvements program.
[4:13:15] This will be a section of the proposed budget. It will capital assets will be divided into plant and infrastructure plant.
[4:13:25] We'll have every project that we're proposing to fund in the budget document itself.
[4:13:32] And then some of our bigger projects we will have highlighted similar to the description on the right with the, you can see how it has pictures, project names, description, and it has funding as well included in the proposed budget as well as in completion date and future allocations as well for major projects.
[4:13:56] We'll also be proposing three initiatives in the budget.
[4:14:01] One is strategic planning, strategic planning really allows the board to set long-term priorities to really set a long-term focus for the county organization as a whole.
[4:14:15] It also allows the board to get in front of the budget.
[4:14:18] And often the board would may feel that you're at the back end of the budget process.
[4:14:26] Typically, a strategic planning process would be done in the summer and fall prior to the work on the budget.
[4:14:34] And then the strategic plan would then drive the budget process and
[4:14:38] incorporate your priorities and values so forth in that document.
[4:14:43] Again, the other thing that, and here's a couple of examples, this is San Diego and
[4:14:48] Alameda counties, this is their overarching goals, their vision, mission statements, and
[4:14:54] their overarching goals.
[4:14:56] And then you'll see this is an example from Yolo and
[4:15:00] So after they set these overarching goals, for example, in yellows, which is the blue one, they have overarching goal, thriving residents, and then under that, they have goals and objectives, for example, implement the Community Health Improvement Plan as one of the goals and objectives. And then they have homeless reduction, homelessness reduction as another goal. This then would allow you to drive the budget and then eventually start performing
[4:15:29] performance measurement, and this is San Diego, where they have an overarching goal of operational excellence,
[4:15:36] for example, and then they have specific goals.
[4:15:39] This is related to the district attorney as part of the San Diego County, and
[4:15:44] then they have performance measures that are driven by those goals.
[4:15:48] And so once you've adopted a strategic plan, it hopefully drives your budget and
[4:15:52] then eventually on the back end leads you to develop a performance measurement program.
[4:15:58] And again, this is not a quick effort, this is multiple years that we take, you're talking a few years just to get it going and to get it fully implemented.
[4:16:07] I think you probably need three years to really get to the point of doing performance measurement, but I think it's a very worthy, worthy goal.
[4:16:15] Another initiative that we are going to include as a proposal in the budget is continuous process improvement.
[4:16:22] This relates to how do we improve the delivery of our services.
[4:16:27] We know that that is always an issue with every organization both in the private and public sector.
[4:16:34] This process was actually initiated after World War II and by Toyota when they actually,
[4:16:41] that's how they approved their production facilities after World War II,
[4:16:44] was actually an American professor who came up with this method of performance, a process improvement.
[4:16:50] And locally, Granite Rock, they've won the Ball Bridge Award a number of times based on this very same process.
[4:16:58] And I've attended a few of their classes that they've given on this as well.
[4:17:04] And so it's basically a ground bottom up process, not a top down.
[4:17:08] It's not a consultant coming in and saying, here's how you do things better.
[4:17:11] It's really getting our employees to give their ideas about how to improve our processes.
[4:17:17] It's giving employees the time and the structure to have the input and how to improve our service delivery.
[4:17:25] And again, this is an example on the screen of a number of jurisdictions that have done continuous process improvement.
[4:17:33] And it is something again that will take a number of years to implement, but I think is again another worthy goal to pursue.
[4:17:42] So that concludes the first part of my presentation.
[4:17:46] I'll come back at the end and provide a preview of next year's budget.
[4:17:51] But at this point, I'm open to questions, and then if not, we'll get into the departmental presentations.
[4:17:56] All right, questions.
[4:17:58] Supervisor Coonerty looks eager.
[4:18:00] Sure, so first of all, thank you for this.
[4:18:02] I think it's really transparent and it's moving in a good direction.
[4:18:06] I know it's going to take a while to get there, but I'm excited that we're moving.
[4:18:10] We're heading this direction.
[4:18:12] One of the things we talked about was the possibility of starting to look at two-year budgets.
[4:18:16] Recognizing we have to do a budget every year, but that basically you free up staff to do performance measurement in the off year.
[4:18:26] What do you, and San Mateo and Moran and other counties have moved in that direction?
[4:18:31] What do you think about that going forward?
[4:18:33] One structure that we looked at that we thought was very promising is during a multi-year strategic plan.
[4:18:37] And so five to six year strategic plan over arching goals and then two year operational plans where you get down to the goals and objectives and two year timeframes and then tying that two year operational plan to two year budget.
[4:18:49] Okay.
[4:18:50] That's great.
[4:18:51] And look forward to heading that direction.
[4:18:53] And then the second piece is I like how you're starting to group the departments by sort of the service area.
[4:19:00] I'd also encourage that when we look at the metrics that actually we don't just look at department by department.
[4:19:07] There are metrics because so many of the problems in our community require a number of different departments to work together that we figure out what those within that area, what our goals are, and then everyone, each department can play a role in that.
[4:19:22] I understand this is taking steps, but that's where I'd like to end up.
[4:19:29] And the third one is, I think just because there's so many department heads in the room, I think one of the things that will be interested in a budget time is, when you're doing your presentations, what do you plan to do that's risk or an innovation that we will understand may not work in the following year, but sort of how are you building innovation into your department and something you're going to try.
[4:19:53] So just as a heads up, when we're heading towards June, I think I'm going to be asking all the departments to present what that looks like within their department.
[4:20:05] So starting talking to your managers and supervisors and line level staff would you want to do.
[4:20:11] But thank you.
[4:20:14] Questions?
[4:20:16] Yeah, I think it's reassuring to hear that, you know, we're holding steady.
[4:20:21] Generally, though, I have never gone into a budget session with more uncertainty, and it's not because of what we are doing, but what the federal government, especially with the Affordable Care Act, may or may not do, and then with the IHSS situation that if unchanged, will mean what about $3 million to our county?
[4:20:43] The IHSS, yes, we're going to hear more about that, but it could be $39 in sort of the
[4:20:51] worst case scenario.
[4:20:54] Yeah, it's just kind of the uncertainty of it all is troubling, but it's reality as
[4:21:01] well.
[4:21:01] And we won't know that until probably the spring anyway until the May revise, certainly
[4:21:08] from the state.
[4:21:09] I do understand though that we are making efforts to the counties throughout the state to get the governor to reassess his IHS's decision.
[4:21:21] With the reserve accounts, it's hard to gauge maybe when you go up a notch on the ratings and all.
[4:21:29] How much that actually saves you.
[4:21:31] But can you give any, you know, if we're, we were, we were down at 7% for a while at a long time for five years ago anyway, we're up over nine now.
[4:21:44] How much is that? I don't know. How do you measure that? How good that is for us to do this? Because I think it's hard to explain to people when you have so many needs, the value of us having to reserve.
[4:21:56] Certainly, I'll answer that.
[4:21:58] There is not a definite answer that we get from rating agencies.
[4:22:02] We tend to get the negative answer if we're too low.
[4:22:05] Mary Jo Walker, who was in this position before I was, when she was beginning to work with
[4:22:09] you on the reserve policy, was beginning to get indications from the rating agencies that
[4:22:13] we were too low.
[4:22:14] And that's when you began the process of going to 7% and now to 10%.
[4:22:19] When we hear back from rating agencies this past year, we went out and did many refinances.
[4:22:25] They will tell us the thing that will make your rating go higher, is if you have more reserves,
[4:22:30] if it goes lower, if you have less, they won't give you a finite answer.
[4:22:34] The one thing that we can do for you the next time we go out is pay attention if, at the same
[4:22:39] time, that we're issuing debt if there happens to be another entity who has a lower rating,
[4:22:44] that's issuing debt, but it's not something we can just get a number for.
[4:22:49] Yeah, and you know I was when I was looking at the budget and we'll get into more details
[4:22:55] and housing and all I was just seeing how this housing problem with the high prices and
[4:23:01] I think just as today or yesterday the median price was over $100,000 which conflictuated
[4:23:08] with one high price sale I know but I just looked at what California had been doing and
[4:23:14] their target of producing 100,000 units per year is well below their target of 180,000
[4:23:22] units per year.
[4:23:24] So this is a real troubling situation for us.
[4:23:29] We know the need is there, the affordability is not there for many, many people, but how
[4:23:34] we really address this issue with cooperation from the state that is almost falling in half
[4:23:41] of what its target is, is really something that's really a concern to me.
[4:23:48] I know it's all of us to have families have their homes here, the moderate and affordable
[4:23:54] income housing families.
[4:23:57] So it's just something that I think the general public needs to know that we're facing because
[4:24:03] we're a high priced county as far as housing goes.
[4:24:07] I mean, you hear we might be the highest price in the nation, or the state, or wherever
[4:24:12] the measurement is, but I just, in the state, I just saw that one third of the people
[4:24:19] spend more than half of their income on the household, on housing, or one half spend
[4:24:26] at least a third, one way or the other, it's high, and we're really not on the right side
[4:24:32] of that one, but it's going to be hard for us to catch up.
[4:24:35] I think general public should know too that it's going to be a difficult mountain to climb to provide
[4:24:42] this housing element for the people of Santa Cruz County who really need it in the middle income range.
[4:24:51] Thank you. Supervisor Cap, you had some questions?
[4:24:53] Yeah, I guess on that, the reserves just following up on that.
[4:24:57] That affects credit rating and how we do business with other lending or bonds or things like that, right?
[4:25:05] Correct.
[4:25:06] How are we rated right now?
[4:25:08] What's our rating with, would that be Moody?
[4:25:11] We have ratings, but again, long-term and short-term ratings with Standard Imports and
[4:25:16] Moody's, and let me get back to that information and I can provide it to you.
[4:25:25] So our long-term rating with Standard Imports is double A negative, and Moody's it's A1.
[4:25:30] Again, we were upgraded recently, we had a review in October of 2016.
[4:25:35] Right.
[4:25:35] A couple of years back it was a B something, right?
[4:25:39] I wasn't involved at that time.
[4:25:42] I don't think it was that low.
[4:25:44] Yeah.
[4:25:44] No, it wouldn't have been that low.
[4:25:46] I guess the thing that I'm worried about is the crisis of the vanishing middle class.
[4:25:53] I mean, we've got to watch out really close.
[4:25:56] If you own a home, that'll make somebody upper class and everybody else will be renting.
[4:26:03] and they'd be in a lower economic class.
[4:26:08] There's got to be something in the middle there
[4:26:10] with the rising costs of homes now,
[4:26:13] almost to where they were before the crash.
[4:26:20] I mean, that's something we've got to look at.
[4:26:24] I don't know how we're going to fix that.
[4:26:26] Well, just circling back down to these ratings,
[4:26:28] I do want to emphasize the better rating we have,
[4:26:31] the better price we're going to get
[4:26:32] that when we go out to borrow money, and that in turn saves money for the county.
[4:26:36] That's correct.
[4:26:39] Thanks.
[4:26:41] Well, I just want to say thanks for this information.
[4:26:46] I just want to get back to the structural deficit question.
[4:26:50] You look at it as these figures around $8.1 million, but because of the carryover of the fund balance,
[4:27:00] that you think that that that will be a problem for this year.
[4:27:05] Not in the current year.
[4:27:07] The current year, we're making up the structural deficit with increased
[4:27:10] revenues and carryover.
[4:27:13] Next year, increased cost increase again and we're always paying catch-up, right?
[4:27:17] So that's why we have that ongoing structural deficit.
[4:27:20] Yeah, no, I mean, and the board has worked, I mean, this past year to try to add money
[4:27:25] to the bottom line.
[4:27:26] Yes, and it's actually we hope that it won't increase and we're trying very hard to make that happen.
[4:27:34] I really like the new budget format and I spend a lot of time with that document so I think it'll be a lot easier to read,
[4:27:42] at least in some of the format changes that you're talking about.
[4:27:47] I wanted to get a little bit more information about the CIP question.
[4:27:50] I understand CIP projects being in the budget, but we're used to the red book, which was a hard to read document.
[4:28:01] And I thought we were trying to get to a CIP that was going to look at projects.
[4:28:05] Maybe they weren't going to get funded this year because we could know that it was going to be funded in 2019.
[4:28:10] Is that going to be part of it or is it only the ones that are going to be funded in the current year part of the CIP?
[4:28:17] Right, so what we will do is, in the budget, we will include all projects that are going
[4:28:21] to be funded, and then we will have a separate CIP document that will have all the other
[4:28:26] projects, and they will also be reformatted to hopefully be more user-friendly.
[4:28:30] Yeah, I think it will be great.
[4:28:31] I mean, the sanitation district done a really good job, and I think that's a very important
[4:28:39] document for someone who doesn't know a lot can read it and understand it, so I think
[4:28:43] this is a good move.
[4:28:47] The strategic plan process looks also very interesting.
[4:28:51] And you mentioned in your remarks
[4:28:56] that it would probably take us three years
[4:28:58] before we could start looking at performance measures.
[4:29:02] And then in the question from Supervisor Coonerty,
[4:29:06] you talked about a five-year process or a five-year strategic
[4:29:10] plan and I'm trying to get a sense of what we're, I imagine what you're suggesting is that we would start in the summer or fall of
[4:29:19] 2017 to start working on the strategic plan and are we going to be looking at, do you think that we're going to be looking at a three year or five year
[4:29:27] plan as part of that, our initial strategic plan?
[4:29:31] Yes, we were thinking of a five to six year plan with the overarching goals and then two year operational plans.
[4:29:40] Do you expect before the budget hearings to come to us with a more fleshed out about what that process might look at, or is that something that would be that we wouldn't get it till August?
[4:29:54] No, oh no, we intend to have that drain budget hearings, so you would have more detail
[4:29:58] about what a proposed part-
[4:30:00] The process would look like in that way you can give us feedback. And that way, once if we can come to an agreement on a process, we can start this summer, potentially. Right. Well, I hope that we get detailed information about it, not just a line item and graphics, but it would be really helpful to get detailed information. Okay, why don't we start with the department? All right. Public works will be the first department.
[4:30:47] Good afternoon, Mr. Presley. Good afternoon, Chairman.
[4:30:51] and they pulled in board members.
[4:30:54] I'm going to go to the first slide here, I think.
[4:30:56] I can find it.
[4:31:05] Very good.
[4:31:11] Much better with robots here.
[4:31:12] It's not working.
[4:31:13] There it goes.
[4:31:14] Okay, I'm John Presley from the Department of Public Works.
[4:31:16] I do have staff here today, so I welcome them as well.
[4:31:20] I'm going to start off a little bit about the storm damage.
[4:31:24] And as you know, this has been an extraordinary year for us.
[4:31:29] Like no other.
[4:31:30] The good news is we still have a few intact roads out there.
[4:31:35] The not-so-good news is these numbers that are shown here, the 30 million, is probably closer to 40 million.
[4:31:41] And the one million on the Forest Account, and that's where we're opening up roads, removing slide materials, and you know, where people get home, that's probably over 2 million at this point.
[4:31:52] We have met with Cal OES and FEMA at this point and we're documenting all the
[4:31:58] storm damage through disaster survey reports. We're also met with Cal Trans
[4:32:03] Briefly and we hope to meet with FHWA as early as next week, working with
[4:32:09] Congressman Panetta, Congresswoman's, and an issues office. So they've been very
[4:32:16] helpful to kind of catch the attention of FHWA, which is the Federal Highway Administration.
[4:32:24] What we're also looking at is internally is ability to do a recovery unit within public
[4:32:32] works and that's going to include where we maybe bring on or work with our analysts and
[4:32:39] and accountants to coordinate most of the storm activities in working with our engineering
[4:32:45] staff. Our engineering staff need the time to actually do the engineering work. So we
[4:32:51] can do all the other stuff of the planning preparation for financing, timing of construction,
[4:33:00] all those through our analysts and our accountants. Also develop the internal funds that we need
[4:33:06] to support the local match for all the damage out there.
[4:33:13] One of the other things that we're also exploring, and we did mention this at the Lake
[4:33:17] View.
[4:33:18] I brought this up at the Lake View meeting with Supervisor McPherson last night, was the
[4:33:22] idea of maybe looking at a CSA.
[4:33:26] And that was brought to us by Supervisor Cooner, D's office.
[4:33:30] There is a chance that we could look at that through a benefit assessment over the existing
[4:33:35] 91, 2 and 3.
[4:33:38] We could look at a 3-5-year recovery emergency effort, it would be a, if we declared an emergency,
[4:33:46] we could do a 50% plus 1 vote and it might be as simple as a mail-out ballot.
[4:33:51] So we want to study that a little more, work with County Council.
[4:33:54] So if that's a, if that's a go, we'd like to do a poll and possibly move forward with that.
[4:34:01] So, and the idea is we would, there is 391 North Midd County and South County.
[4:34:07] We would poll each, each of those districts or each of those three areas and see if there's a support for that.
[4:34:13] It seemed to be the residents in Santa Cruz County were very supportive last night.
[4:34:17] I think we're ready to sign up right now for improving our roads as a local match.
[4:34:22] So I'm not so sure about the South County or Mid-County, but we can certainly do a poll and look at that if your board was interested
[4:34:30] And try and get on the tax roll right now is the time to do this because of the
[4:34:36] The amount of damage and the concern of the public out there. So moving on, you said let's look
[4:34:45] There he goes. Okay
[4:34:48] Street maintenance
[4:34:51] We typically, we run about 12 million a year on street maintenance, and that's for basic roadway maintenance.
[4:34:58] It's also for take care of our fleet, our roads, our drainage, litter, graffiti of maintenance, so it's in mowing.
[4:35:06] We have probably a, I don't want to use structural deficit, but we have a deficit of about $150 million, and it's probably climb since then,
[4:35:14] only because of the magnitude of the storms that we've seen.
[4:35:19] Funding sources that we have and we plan on having in the future for street maintenance
[4:35:25] is obviously the measure D which we would like to use for repairing our roads or resurfacing
[4:35:31] our roads.
[4:35:32] We have a new traffic impact fee which $600,000 this year and it goes to 1.4 next year.
[4:35:37] We have existing CS890 which generates 2.7 and this is where we place a benefit assessment
[4:35:43] on top of this for emergency repairs.
[4:35:47] We also have existing gas tax of five to six million dollars.
[4:35:52] We supplement that often with grant money that comes in so we try to do a lot of grants,
[4:35:58] you know, we pursue a lot of grants for resurfacing or safety improvements.
[4:36:03] So that's, I didn't put that on the slide, but that's out there.
[4:36:06] Now the future funding, SB1, AB1, obviously we've been working at that for several years.
[4:36:10] I heard that they got through a second committee, the Senate Environmental Committee, which
[4:36:17] is good, and from Supervisor Stone's office they're talking about a vote as soon as April
[4:36:23] 6th.
[4:36:24] So I am sending out a global letter to all the public works directors to get down there
[4:36:29] and meet with your legislators and pursue educating them on the need for AB1 SB1.
[4:36:34] So that's an ongoing process, we hope to see that pass this spring.
[4:36:41] Okay, equipment facilities,
[4:36:46] one of the, one thing about you say county roads, we have probably
[4:36:50] the oldest equipment in the state of California, it is old.
[4:36:55] We have a couple dump trucks that are, well, we have a number of dump trucks that are not
[4:36:58] going to meet car regulations anymore after probably early this spring, there are diesel vehicles
[4:37:04] that need to be replaced, we're looking at purchasing two vehicles and if we keep our dump trucks
[4:37:11] below a thousand, thousand hours, we can use the rest of them throughout the rest of the
[4:37:15] year, but at some point we need to replace our dump trucks.
[4:37:18] We also have patch trucks that are, you know, the 1989 variation or age.
[4:37:26] Generally, I have a 10-year lifespan, we've exceeded that, and we have pickup trucks that
[4:37:30] need to replace.
[4:37:31] We have backhows.
[4:37:32] So, part of that whole transportation funding that I just talked about would go towards purchasing
[4:37:38] some of the new equipment.
[4:37:40] Bromor facility.
[4:37:42] You can look at any of our road facilities.
[4:37:44] They need some basic work.
[4:37:46] So we started the process of looking at that, improving,
[4:37:50] you know, the roofing the windows and the eating out there.
[4:37:54] So we're hoping to see, you know, ideally,
[4:37:57] we'll see a new gas tax this spring,
[4:37:59] and we can do some upgrades,
[4:38:01] and then we can really get back to fixing our roads.
[4:38:10] This is another thing that we're working at, the state level, is trying to develop some new ideas on drainage and how we can support it at a statewide level.
[4:38:20] Primarily through the County Engineers Association and through the California State Association of counties.
[4:38:26] We definitely need to look at future funding needs, both environmental and infrastructure improvement water quality.
[4:38:35] for a number of our zones, in particular zone 4, 5, 6, and possibly 7,
[4:38:41] probably need to, you know, need to be increased.
[4:38:44] There is a prop 2, 18 condition on that, so it's going to have to go out for a public vote,
[4:38:49] but it certainly is something that we have some aging culverts out there.
[4:38:54] We need to do better maintenance on our channels and things like that.
[4:38:58] Pump stations as well, upgrades on that.
[4:39:01] The power river, oh, let me talk about.
[4:39:04] We're also seeing some new regulations coming down from the State Water Board and the Regional
[4:39:08] Board.
[4:39:09] And, you know, they're really sticking to a lot of agencies.
[4:39:12] I hate to use it sticking, but there's new requirements of water quality issues that
[4:39:17] we're constantly at the pay attention to, and they're increasing their fees for the permits
[4:39:23] on a yearly basis.
[4:39:25] The power river, obviously, there's some complexity of that working with the Corps of Engineers.
[4:39:31] We're going to bring that back on March 21st for further discussion, but it's a constant
[4:39:36] up and down battle with the Corps.
[4:39:38] Every time we think we take a step back, we get pretty much kicked in the teeth and
[4:39:42] knock back two steps so ongoing issues with them, but we'll give you more complete details
[4:39:50] on March 21st on the zone 7 meeting.
[4:39:53] And
[4:39:57] then solid waste, we are, we're doing fairly well.
[4:40:04] We do have some new regulations from Cal recycle about the organic so that's been implemented
[4:40:09] through for large producers, especially grocery stores and stuff.
[4:40:15] We do not want to bury organic in our solid waste facilities anymore, they generate methane
[4:40:20] gas, so things like that.
[4:40:22] So we're working on our organic program.
[4:40:23] We are also looking at some land purchases for building a new facility for organic waste
[4:40:31] and green waste recycling.
[4:40:34] We're near on our franchise agreement.
[4:40:36] We want to bring that back to your board shortly.
[4:40:38] That's the franchise horror.
[4:40:42] And then we're working on also the green waste franchise or green waste recycling contract
[4:40:51] as well, which we're going to bring back to you in the near future.
[4:40:55] I think you'd be impressed with the negotiations that went on for those contracts.
[4:41:02] Just to let you know, we've put about 12,000 tons of storm damage material out at Boinevista.
[4:41:09] We hope to recycle that out at some point or so at a cost of about 190,000 dollars.
[4:41:15] One thing that we could use in this county is a place to put land.
[4:41:20] Well, just material, yeah, I'd say material third soil, when we have these massive landslides
[4:41:29] on our county roads, so we're working with Scotts Valley right now to dispose of it, some
[4:41:35] of it on an interim basis, but ideally we need to purchase a future facility.
[4:41:40] So that completes it.
[4:41:42] I think we have a lot of stuff that's happening right now that's progressing.
[4:41:47] I didn't mean to get to the sheriff's here.
[4:41:50] Okay.
[4:41:51] Let me see whether board members have questions about public works.
[4:41:57] Supervisor McPherson.
[4:41:58] Yeah.
[4:41:59] You've heard the congratulations for everything your department's doing.
[4:42:05] Cookies and all, but today.
[4:42:07] But one thing about with the storm situation, and this is not specifically at this budget,
[4:42:13] but when we have this down, so many trees, and especially up in the Valle,
[4:42:19] I don't know if we can, it's a matter of money, but for people to be able to deliver some of their rubbish to the, you know, on the weekends in particular.
[4:42:30] That's what they've been always asking. We'll get into that. I'm sure more in the budget sessions, but that's something that is a layering question.
[4:42:37] It just goes on and on. I'd like to see if, you know, we look into that as we go into next year's budget too.
[4:42:43] if we can get that kind of service on a weekend or in response to a storm like some of the storms like we've had.
[4:42:50] I mean, reopening on a Sunday or would it be, you know, so we've sort of looked at that, would it be a replacement of, could we close on Monday, for example, you know, just kind of offset that because it is, it's a very expensive process to open up on Sunday and we don't really see any new revenue increases, something like $800,000 more to open up on a Sunday through the whole year or so.
[4:43:13] Yeah, I don't know, I just looked into that certainly.
[4:43:17] Yeah, if you didn't, weren't open Monday and you were open Sunday or one day of the weekend.
[4:43:21] We could certainly look at that.
[4:43:22] And then with the, I think it would be interesting to me, everybody worked very hard on this measure D to pass and thank heavens it did.
[4:43:31] But to put in a fee, a temporary fee of maybe five years or something on the 90, three zones or areas, that would be, I'd be interested to see how,
[4:43:42] Well, what the response is to that, what we had at Lakeside School last night was very positive.
[4:43:47] But if we're going to push the button on something like that, this would be a good time to do it.
[4:43:53] It's fresh in people's minds.
[4:43:54] And it's the only way we're going to get more revenue for it, I think.
[4:43:57] Yeah, I think you're right.
[4:43:59] When we actually tabulate everything up, we'll see what our local match is.
[4:44:03] We can gear that out, or sell that out, or provide it to the public and say, this is the type of resources we need.
[4:44:10] this is why we want a certain amount on that CSA or benefit assessment for that particular
[4:44:14] district.
[4:44:15] So that's part of that recovery unit that I'm looking at is how we kind of couch everything
[4:44:21] and sell it out there to the public and say, this is what we need to actually rebuild
[4:44:25] the roads.
[4:44:26] And we look at some of the revenue coming from measure D and all we look at, we just think
[4:44:30] of roads and the surface roads, but the stormwater, the drainage facilities which got clogged
[4:44:35] evident as gave in a lot of instances, could that specifically be part of, or is it now part
[4:44:42] of the recovery process, or the ongoing maintenance process, I guess?
[4:44:47] I'd like to have that be part of it.
[4:44:50] We could, I mean, it's not as, you don't see it as much, but boy, it's invaluable as we're
[4:44:56] learning today, that if we would have a better storm water.
[4:45:00] System to handle that onslaught of water, which we don't expect every year, but it'd be helpful. I think it should be part of our re-building process. It's not really a good thing when you run a redwood tree through a culvert that's underneath the road sometimes, and they tend to block up and we lose the road, so. But there are undersized culverts that we need to upgrade on a lot of our rural roads, and we could factor that in as well. So.
[4:45:30] I think you're heading in the right direction, I guess my only message would be how much faster we can move, you know, a month of sunny, sunny weather and the willingness to pay a tax goes down or additional fee for a short period of time goes down significantly.
[4:45:48] So I think we want to move as quickly as possible, and also the same with measure D where we have a great bond rating,
[4:45:56] money's cheap, we know that interest rates are going to rise three times the next year.
[4:46:01] The longer we wait to borrow, and I know we're hamstring a little bit by the RTC, but whatever we can do to finance the interim,
[4:46:09] It seems like this is the time we want to figure out how to bond out while we'll get more bang for our buck.
[4:46:18] So trying to move this quick, understanding you're getting pulled in a lot of directions.
[4:46:22] But we've got to move, I think for both of those things sooner rather than later or we lose money.
[4:46:28] Okay, we're going to try and expedite that. We do have to do an engineer's report and we really want to do a poll.
[4:46:33] So we'll get on that right now.
[4:46:36] So,
[4:46:39] could you just thank you for the presentation.
[4:46:42] CSA 90, could you just remind us with a geographical destination?
[4:46:46] Is that the entire county or is that?
[4:46:48] It's broken up in three sections.
[4:46:52] There's, it's hard to say.
[4:46:53] It's, you know, your live oak is probably a border line for North County up.
[4:46:58] And you're from North County where your border, where your district starts,
[4:47:02] It goes down to maybe the Apples area there, so that's Mid County.
[4:47:09] Generally the North County and Mid County generate the most resources and it's about 2.3 million between the two of those and there's $400,000 generated by the South County.
[4:47:20] Because I think it may be a wise strategy but we will be faced with some difficult questions if not everybody passes it.
[4:47:29] So, for instance, in the example you used if the North County folks were willing to tax
[4:47:36] themselves, but the mid-county folks just failed to get to the required threshold, but
[4:47:42] we're close.
[4:47:43] It doesn't mean that Valencia Road or SoCal San, I mean we still have to fix those roads.
[4:47:48] So it creates, when we do this by zone, it creates kind of a problem as to which pot of
[4:47:54] money we're going to get to, because on some of these critical roads, they're used by everybody in the county, right?
[4:48:01] I mean, it isn't just that the people of the summit area or the Aptosales or the Sailor-Renz over Alley-Due
[4:48:08] where don't want to do this, but these are, some of these roads are used by everybody, and that's going to become our challenge to figure out how to do it,
[4:48:16] whether if I don't, you know, I'll look forward to the polling.
[4:48:19] And I think the polling will identify hopefully what people are willing to pay for that into that benefit assessment could be $25, $50, $100.
[4:48:29] So that's kind of like the tipping point there, maybe South County, $35, Mid County, $40 and San Lorenzo Valley is maybe $100 per year for next three to five years.
[4:48:44] Because sunny days, I agree with my colleague that sunny days may convince people you know that things are not great
[4:48:51] But if you have to go you know five miles out of your way just to get home
[4:48:56] Whether it's on a sunny day or a rainy day, you know
[4:48:59] It's you get reminded of that pretty pretty regularly
[4:49:03] And I know for constituents of mine in the rural areas when roads have been knocked out for a long period of time
[4:49:08] They never fail to mention it to me every time I see it. Yeah, we've got that problem, too
[4:49:12] Yeah, I mentioned a lot, so the other, and then the other sort of
[4:49:18] The the challenge as we will hear is, you know, county fire is gonna come up here
[4:49:24] And they might need to go out to the ballot and you know the parks have talked about going out to the ballot
[4:49:28] So it's gonna be we're gonna see where polling is and what's most likely and where we need the resources
[4:49:35] But I think we have to it's a strategy. We have to at least pursue
[4:49:39] Until we know have a better idea. Yes, but thanks for the work
[4:49:43] Supervisor Capit.
[4:49:44] You bet.
[4:49:45] Well, it's been in the news lately, the gas tax, the gas prices per gallon going up maybe
[4:49:51] in the spring as much as up to $4 a gallon, but you know, that's of course a projection
[4:49:58] just to the newspaper right now.
[4:50:00] But how much would that raise in price per gallon actually affect the money coming into
[4:50:08] your work crew?
[4:50:10] How much would it raise?
[4:50:13] How much more money would revenue would that bring in?
[4:50:17] We would see around $8 million command for county public works for road maintenance purposes.
[4:50:22] As it is right now.
[4:50:24] No, as new money would come in, if they, if they may be one, yeah, SB one, if it was passed it would be around $8 million.
[4:50:31] Now it's just not all gas tax, it's also, you're looking at electric vehicle motorists, drivers,
[4:50:38] drivers.
[4:50:40] They would see an extra charge on their DMV license. They are not paying anything
[4:50:47] for road maintenance right now. Anybody drives electric cars, not paying any maintenance.
[4:50:51] Yes, but they are saved.
[4:50:53] There is a fairness to this, my fellow.
[4:50:55] Yes, but they are saving the, they are helping the environment.
[4:51:01] Most certainly.
[4:51:01] Definitely.
[4:51:02] Yes, and I guess the other is, what do I tell people in the Lycan community? I know if
[4:51:08] If we don't get the 100-year plan or whatever going, I mean, what more can we do there with college lake and
[4:51:16] quarterly this creek and
[4:51:19] self-supporting creek and Pinto stream all running together on that one culvert. We need a bigger levy system
[4:51:25] when we need out there and that's that's something that will continue to support through the Corps of Engineers.
[4:51:32] players, whether or not they're going to ultimately construct it or not, that's still out there.
[4:51:40] That's something we hope to resolve one way or another in the next year, whether or
[4:51:46] not we need to do something other than the core.
[4:51:49] Can we actually go in that to covert?
[4:51:52] This is a pretty big one, six foot and actually just clean it up.
[4:51:55] I know a fishing game will get involved in that big time, but it's actually not bad.
[4:52:01] Yeah, it's actually been cleaned out with the recent flows.
[4:52:04] There is debris that comes in and I know that our staff went out there and pulled debris
[4:52:08] out of there.
[4:52:09] But, you know, that channel is fairly clean right now because of all the mass amount
[4:52:14] of water that came through there.
[4:52:16] So it's, we'll continue to monitor it, as we always do.
[4:52:23] But it's, the whole system's been flushed pretty well through these storms.
[4:52:28] Yeah, I guess would cause the backup is just too much water coming from three different sources.
[4:52:34] That is correct. That's what there was tremendous amount of water and it all came in at the same time.
[4:52:39] And I guess the fastest moving stream actually gets through there quickly and that backs up the slower moving ones, right?
[4:52:48] Correct.
[4:52:48] Okay,
[4:52:51] thank you very much. Thank you.
[4:52:55] Next, we move on to the sheriff.
[4:52:56] Sheriff and county fire will both come up right now.
[4:53:13] Good afternoon. Chairman Leopold, super registrar. Jim Hart, sheriff corner. Today I'm going
[4:53:20] to talk to you about not so much where we're at today, but some items that we're looking
[4:53:24] at moving forward, particularly in the 17-18 budget. And supervisor Kennedy, you mentioned
[4:53:29] that you're looking for some innovations, and there's a number of things that we're in
[4:53:33] the process of doing right now and intent on doing in the future that are very innovative.
[4:53:39] and I think we'll really move our department in public safety and a positive direction.
[4:53:54] Wrong way. Area. So with the designation of the national monument, we're anticipating
[4:54:04] somewhere in the neighborhood of several hundred thousand visitors on the North Coast
[4:54:07] in addition to what we already have and then also with the opening of the San Vicente Redwoods
[4:54:13] in the next year to two years, it's an 8500 acre parcel that will, our public land will
[4:54:20] be opened up for public use. The need for public safety up on the north coast is, it's
[4:54:28] badly needed. I think it's an extremely underserved community. And so we're doing some things
[4:54:32] right now. The sheriff's office along with the county parks department is looking at partnering
[4:54:38] with some private funders to provide park services and public safety in and around the San Vicente Redwoods property, and then also with the national monument status.
[4:54:51] I'm not convinced that BLM is in a position to provide any kind of public safety on that property, but not so much on the interior of the property that I'm worried about, it's mostly along the roadways and the beaches and the increased traffic, traffic parking, overnight camping, beach use.
[4:55:07] So, those are all areas that we will be dealing with as a sheriff's office on that north coast.
[4:55:13] And so, moving forward into the 1718 budget, I'm looking at increasing staffing on the north coast
[4:55:21] and getting more of a permanent presence up there.
[4:55:24] How many acres is that, good to me?
[4:55:29] 57 hundred.
[4:55:31] I thought there's a lot of other land, San Vicente's, double that, next door.
[4:55:37] Under facilities, as you know, we are currently in the construction process for our rehabilitation and reentry facility on our Roundtree South County campus.
[4:55:50] And that money came from the state under one of the governor's release for jail improvements and jail constructions.
[4:55:59] And with that, we're building a facility for long-term inmates.
[4:56:04] It's back in 2011 when prison re-alignment hit, our county jail system turned into a state prison where we're now housing an average of 70 state prison inmates on any given day in the county jail system for as long as 12 years and the existing facilities we have are not conducive to staying for that length of time.
[4:56:24] And so the rehabilitation and reentry facility is built for long term stayers and it's going to be focusing on vocational training, programming.
[4:56:35] We're partnering with Cabrio College to get these people some college units as well.
[4:56:40] But with that, it's opening up some opportunities.
[4:56:43] And because Blaine Street for women, which is a minimum security facility and the way that the justice system has changed over the last few years,
[4:56:52] Because we're just not housing that level of inmate any longer.
[4:56:56] And most of the minimum security females are out on electronic monitoring.
[4:57:01] We're just don't house minimum security inmates anymore.
[4:57:04] And so our daily average daily population at Blaine Street reached two.
[4:57:09] And so we have temporarily closed that facility and moved those two women back over to the main
[4:57:15] jail.
[4:57:16] And sometime this month we're going to be moving about 35 women down to round tree, medium security.
[4:57:21] and we've already cleared the space for them
[4:57:24] and one of the housing is there.
[4:57:26] And those 35 women will be living in that medium security jail,
[4:57:30] which is much more appropriate for good programming
[4:57:34] and visitation.
[4:57:35] And I think it's going to meet the needs of our women's population as well.
[4:57:43] We're also looking at various systems we have internally
[4:57:47] And we're looking at using a gender specific assessment tool in particular to women because there's been some argument that we're overclassifying the women.
[4:57:58] And so when we go to this tool, it may be that some of the women that classify as medium or maximum may be able to classify down and we'll be able to reopen Blaine Street.
[4:58:06] But as of right now, Blaine Street is temporarily shuttered.
[4:58:09] But with the opening of the new Roundtree Rehabilitation Reentry Facility,
[4:58:14] we'll be housing about 154 people down on that Roundtree campus,
[4:58:17] which is about a third of our entire jail population.
[4:58:20] So there'll be a significant number of people staying down there.
[4:58:24] The second thing that we're looking at is we have a large,
[4:58:26] shelled out space at our headquarters facility that has always been intended
[4:58:31] to be a shooting range.
[4:58:32] We ran out of money when we built a facility.
[4:58:35] And so we have a number of trusts that we're building up some dollars
[4:58:38] on, but right now our staff, our sworn staff, has to qualify at the shooting range quarterly.
[4:58:44] So every three months we either have to get them down to Mark Lee's down in Watsonville or Santa
[4:58:48] Query County Sheriff's Office or San Benito Sheriff's Office and use their ranges.
[4:58:52] And so we're looking at building a range at our headquarters campus.
[4:59:05] Another emerging issue is we have a very sound forensic services unit and they focus primarily
[4:59:14] on latent fingerprints, they work on skeletal remains, and then also forensic digital evidence.
[4:59:22] And in the next three to five years, we have a plan to also move that laboratory to have DNA
[4:59:27] capabilities. And the advantage to the community on this will be that when we have a remarkable case,
[4:59:36] if it's a series of violent offense, we submit DNA to the Department of Justice. And those are
[4:59:43] priority cases, the turnaround time on those cases are 6-8 weeks to get DNA evidence back.
[4:59:50] And if we have our own lab, we'll be able to turn around evidence in 24-48 hours, which
[4:59:55] I think will greatly enhance our investigative abilities and our abilities.
[5:00:07] There's a sort of several steps to get to DNA accreditation. The first one is to get our current forensic lab accredited. And it's going to cost a few dollars, particularly the dollars are going to be dedicated for DNA software. And we have a trust right now, a DNA trust that will pay for a majority of those expenses.
[5:00:30] Another emerging issue is under our recovery centers.
[5:00:33] You might recall two years ago we opened up a recovery center for chronic inebriance.
[5:00:37] My goal was to divert a large population of people who are arrested for
[5:00:41] being drunk in public from the county jail system into a recovery center.
[5:00:46] We were able to get some federal funding and partner with Janice of Santa Cruz to run the facility.
[5:00:51] It's currently located in the blue house across the street on jail property.
[5:00:55] And so far in about the first 18 or 19 months of operation we've diverted over a thousand people from county jail into that recovery center and Janice Santa Cruz also provides services to these folks as they're leaving and there's been a number of success stories on people who've actually accepted services and they're no longer the person who is frequently arrested and coming in and out of jail.
[5:01:19] That grant expires on December 31st, and I will be proposing in the upcoming budget to continue our partnership with Janice Santa Cruz.
[5:01:30] We're looking at running that facility with some reduced staffing, we're also looking at how we can increase the use of that facility.
[5:01:38] As the grant is written, it was written that local police agencies had the option of taking their drunken public arrests to county jail or to the recovery center.
[5:01:48] And I think moving forward, if we self-fund this, we'll make it mandatory that if a person is not fighting or violent that they will have to go to the recovery center, we won't accept them at the county jail.
[5:01:58] And we're also currently accepting first time DUI offenders, and we'll make that mandatory as well.
[5:02:03] And then I also think there's opportunities for people coming in, for low level drug violations, in particular under the influence of drugs, to not go into the county jail system and go into the recovery center.
[5:02:14] So I think we'll be able to do it a little bit less expansively and also increase the use moving forward after we get a little more control outside of the grant.
[5:02:32] Staffing has been an issue for a number of years with your board support and also the support of the CAO.
[5:02:38] We've been able to refund a lot of our deputy sheriff positions that were lost during the recession as you might recall about two and a half years ago we were 22 positions down from 2006 levels.
[5:02:47] And we've been able to refund 18 of those positions, so we're currently four positions down.
[5:02:53] This graph shows that the narrative on the left shows that we have 126 deputies, that's not counting sergeants, lieutenants, chief deputies, or myself.
[5:03:02] But we have 126 deputies shares, 122 of those positions are funded.
[5:03:08] And compared from 2016 to today, our excuse me, back to 2006, we're answering about 2000 more
[5:03:17] Our priority calls every year, and our population is increased by about 25,000.
[5:03:23] And so what I'm working towards is at least getting to the same staffing levels we were a decade ago,
[5:03:28] and I'll be asking for the refunding of those four deputy sheriff's positions.
[5:03:32] The graph on the right just gives you an idea, and I understand municipal police departments are much different than sheriff's offices,
[5:03:38] but just to give you an idea of geographical areas to cover population and staffing levels.
[5:03:43] If you look to the far right under Capitola, they have an average of three police officers on duty per shift.
[5:03:51] Each police officer serving a population of about 3,300.
[5:03:55] Scott's Valley has three officers on duty in a given day, servicing a population of about 3,900 and servicing two square miles for each officer.
[5:04:05] Watsonville Police Department has five officers on duty.
[5:04:07] service, each officer services a population of about 10,500 people and they have one square mile they're responsible for.
[5:04:15] Santa Cruz City, please, they have seven people on duty at any given time, servicing a population about 8,900.
[5:04:21] And they have each officer has two square miles to patrol.
[5:04:26] And the county, our deputy shares, we have about eight people on duty in patrol at any given time, servicing a population of a little over 16,000.
[5:04:35] and servicing each deputy service is an area 52 square miles.
[5:04:46] So under budget impacts, under some new staffing that we'll be asking for is we're going
[5:04:53] to be asking to upgrade our current forensics services manager to a lab director and that's
[5:04:59] part of the accreditation process.
[5:05:02] As I mentioned we'll be asking to refund for deputy sheriffs and then what we found on our body
[5:05:08] warrant camera system, which is working very well, by the way, that we just began full implementation
[5:05:14] in January of this year. We have about 135 cameras that are in service right now, and
[5:05:20] then including court security will be coming online here in the next few weeks. But there
[5:05:26] are about 3,000 video segments that are being generated each month right now.
[5:05:35] And what we're
[5:05:38] to go through in order to attach each video segment to a report or an incident and there is an error rate and there does need to be some level of oversight on this body-worn camera system and so we're going to be asking for a property and evidence clerk to manage this this body-worn camera system to make sure that these thousands of video segments that are coming out each month or attached to the appropriate case we did do a study and some departments are saying that for every 100 cameras that they have out that they need one full time employee to manage the
[5:06:08] those 100 cameras, but we think we can do the 135 cameras with one person.
[5:06:15] Other needs I'd mention the recovery center.
[5:06:17] We have a number of software systems that we're looking at purchasing, and most of that's
[5:06:21] behind the DNA and funded with DNA trust dollars.
[5:06:25] And the last thing I want to touch on, and I'm not, I almost feel bad mentioning this
[5:06:30] after hearing John Presley talk about his fleet, but our fleet is, we, during the recession
[5:06:38] We went five years without replacing a patrol car, and so our people drive in very dangerous situations sometimes,
[5:06:45] they drive fast sometimes, and those cars were exceeding 150,000 miles on them.
[5:06:52] With your boards help and the CAO's assistance, we've been able to replace our entire fleet during the last three years,
[5:06:59] which has been hugely helpful, and so in this budget cycle, we're asking to continue that process,
[5:07:06] and replace a third of our fleet, our patrol fleet.
[5:07:10] A patrol car has a shelf life of about three years, and those cars get driven hard, and
[5:07:16] they're constantly turned on and they get driven a lot of miles.
[5:07:19] And so we'll be asking for patrol car replacement along with a number of investigations vehicles as well.
[5:07:27] And that concludes my presentation.
[5:07:29] I'm happy to answer any questions you might have.
[5:07:32] The questions to
[5:07:35] revise them will be here soon.
[5:07:38] Congratulations on doing a great job with the amount of W's you have.
[5:07:41] I hope we can help again this year with the Cotani Cotani Cotani Costari's National Park.
[5:07:48] I do hope this agreement with some private partner's works.
[5:07:54] I think there's no question that the people of Santa Cruz County was excited about this
[5:07:58] becoming a national monument but at the same time was scared that the fallback was going
[5:08:04] be that we were going to have to be the ones to patrol it. And there's, um, those people
[5:08:09] are going to come one way or the other. There's no way you can, but we just have to pressure
[5:08:13] the federal government to try to, uh, to police that area if necessary. Is there, what
[5:08:19] chance in the world would there be to do that?
[5:08:21] You know, I've, I've met with, uh, with BLM on a number of occasions. And, uh, the outlook
[5:08:26] is, is really gram. I, they're, they're making absolutely no promises. And, uh, in fact,
[5:08:32] They're pretty clear that they won't be adding staffing.
[5:08:36] I don't know if the CAO's hearing any differently, but at least in my conversations,
[5:08:40] I'm not hearing about any additional staffing up on that property.
[5:08:44] It's my understanding they have four rangers for an 11 county area.
[5:08:48] And so with that, if there's a search and rescue situation, or
[5:08:52] there's an injury in the park, or there's some sort of a criminal activity.
[5:08:56] I really think it's going to fall on the sheriff's office to respond up there and manage that incident.
[5:09:00] And not to mention, as I had said before, all the impacts on the town and down
[5:09:05] on board and the surrounding areas from that level of tourism.
[5:09:08] Well, I imagine my colleague, Ryan Cooner, has his concerns.
[5:09:12] I know about that too.
[5:09:14] And just to get the status, to get some of the language in that whole national
[5:09:19] monument procedure to have a plan in place and all that will help.
[5:09:24] But as far as public safety services, I'm really concerned about that.
[5:09:29] We're not going to have, it's going to create some problems, but I just, I think that the recovery center is terrific.
[5:09:38] I'm glad to see we're pursuing that and continuing to go down that line.
[5:09:41] It seems to be a long time winner for everybody, not only budget wise, but for the people involved as well.
[5:09:48] Thank you.
[5:09:51] I had a couple questions.
[5:09:55] I appreciate the presentation.
[5:09:56] I really like, you and I have talked a lot about the rehabilitation and reentry facility
[5:10:03] and where you're going with that, and I think that's where we need to be if we really want to turn the curve
[5:10:12] on some of the recidivism that we see in our community.
[5:10:15] So I really appreciate what you're doing there.
[5:10:18] I know that the shooting range in the public safety campus
[5:10:23] that was it's I've seen I've seen the shell you mentioned that you've been putting
[5:10:29] way money I couldn't get in the sense whether you were going to ask for money or
[5:10:33] whether you thought that you would be in a squirrel win enough dollars to be
[5:10:38] able to do that yourself whatever it was five years ago they said it was a
[5:10:43] million dollars I'm not sure what it cost today yeah it's it's somewhere in that
[5:10:46] neighborhood between a million a million five and and what I'm trying to do is
[5:10:50] build up some of these trusts so that we don't have any kind of a general fund
[5:10:53] ask on this? Well, I can tell you, we appreciate that.
[5:10:59] You mentioned about the DNA lab. Again,
[5:11:02] I know that that was a long-term interest of the scientist building on the campus. Is there
[5:11:09] any possibility of us getting resources from our neighboring cities who might be able to
[5:11:14] use the DNA lab as a way of helping pay for it? Yeah, and I didn't mention that, but I believe
[5:11:21] I believe that we would be able to contract out services to some of our law enforcement partners right now, Santa Query County Sheriff's Office.
[5:11:29] They have a DNA lab and they contract out with a lot of their city partners and so I see that occurring here and it would definitely offset some of the expenditures on that.
[5:11:40] Yeah, I mean I think that would be helpful and hopefully it means that they could get their information that quicker so that would be a win-win situation.
[5:11:47] On the recovery center, you know, I think we're moving in the right direction in the 1,000
[5:11:53] diversions.
[5:11:54] It's very impressive and requiring it.
[5:11:57] I think we're long past the point where that's a good idea.
[5:12:01] I think that's an excellent idea.
[5:12:03] The staffing issue is, you know, the board has invested a lot in staffing over the last
[5:12:08] couple of years.
[5:12:09] I think of 17 or more positions.
[5:12:11] The statistics as you mentioned are hard to do an apple to apples comparison because municipal forces generally have better coverage of their more discrete cities than counties do.
[5:12:26] Do we have statistics or could you provide statistics about what sheriff's departments look like?
[5:12:33] You know, we compare ourselves to other counties all the time.
[5:12:35] And there's these eight counties that we compare ourselves.
[5:12:39] How do we look compared to those counties?
[5:12:42] Yeah, and that's a good question, and each county's different.
[5:12:44] Our county's a little bit unique in that a vast majority of our population lives in the unacorporated area of the county,
[5:12:52] where it's say Santa Clara, most of their population lives in city jurisdictions.
[5:12:56] And so we could do some research to find out service populations for
[5:13:02] sheriff's offices and try to find comparisons.
[5:13:05] We are intending, or we've applied for California Commission on Police Officer Standard and Training for them to come in here and give us a staffing assessment, which would sort of be a guide to where we're at and where we could be or might be moving forward.
[5:13:21] We've asked for that service, they did it in corrections for, excuse me, they did it in our records division one year in the report was hugely helpful.
[5:13:28] And so it just takes a while for them to catch up on their lists of requests, but they'll be coming in the next year or two and giving us an idea based on their formulas and their numbers.
[5:13:41] Yeah, it's our deputies are really valuable members of the county family and they're also expensive members of the county family.
[5:13:50] So trying to find that balance and what we might be able to give compared to all these other requests.
[5:13:57] that's that all obviously becomes the hard part of our whole piece because I don't
[5:14:04] just looking at all these requests you could say yeah we need them all and just
[5:14:10] like Director Presley and I'm sure we'll hear from the other directors about
[5:14:14] the needs and just trying to figure out what size of requests if we're looking
[5:14:19] for given our resources is always the big issue. I understand and we're
[5:14:24] We're continually seeking out grant opportunities.
[5:14:27] We just applied for a prop 47 grant that could bring some resources to corrections and I think there's going to be other opportunities moving forward.
[5:14:35] Problem with a lot of the federal level grants is that they really focus on municipalities and not so much on county jurisdictions.
[5:14:41] Yeah, I know that that's been an issue.
[5:14:42] I have seen the Sheriff's Department in the last couple years go for a lot more grant money than they have historically, so I appreciate that.
[5:14:49] And it's part of the innovative way in what you're doing, so I appreciate that as well.
[5:14:53] Thank you other questions seeing none I'll say thank you to the sheriff and
[5:15:00] Say hello to the chief. Thank you.
[5:15:10] Turn on the mic here and set on. Okay, good afternoon, Chair Leopold, supervisors, Ms. Morello, and Mr. Policios, and members of the community. I want to thank you for the opportunity to address you today regarding the matters related to the county fire department and emerging and critical issues.
[5:15:31] I'd like to start with our emerging issues with our response capabilities. We continue to see an increase in the total number of calls for service in the county fire area.
[5:15:40] In the past 10 years, we've experienced an increase of just over 800 responses for service
[5:15:46] annually.
[5:15:47] This increase calls for services and the complexity of the instance that we respond
[5:15:52] to can lead to resource availability concerns and result in slower response times and the
[5:15:57] reliance on mutual aid from other agencies.
[5:16:00] An example, the North Coast, we're experiencing an increase in calls for rescue along the
[5:16:07] cliff sides and the roadways on the North Coast.
[5:16:09] Those types of incidents require us to commit resources for extensive period of time dealing with those complex types of calls for clip rescues and auto extrications.
[5:16:21] Santa Cruz County currently sees approximately 3 million visitors annually.
[5:16:26] And with a recent declaration of the Kontini Coast area's national monument and the potential for an additional several hundred thousand visitors to the area,
[5:16:35] This will only add to that increased traffic congestion that we already experience as well as add to the increased calls for services in the county.
[5:16:44] This will most likely lead to significant impacts for us to be able to provide timely response for service.
[5:16:50] In addition, there's no increase for funding for the County Fire Department with the National Monument designation.
[5:16:58] And it does not provide for any funding for response for calls for service in that general area as well.
[5:17:04] All right,
[5:17:13] our second emerging issue that we are dealing with is the Cal Fire contract.
[5:17:18] Our Cal Fire Labor Group, local 2080-1, as well as our associated staff bargaining units
[5:17:24] have negotiated new labor agreements that include an increase in compensation.
[5:17:30] Additionally, the staff benefit rates are anticipated to increase as well, which will reflect in
[5:17:36] the cost associated with the cooperative agreement with Cal Fire for services.
[5:17:41] In addition to this, the state also is continuing to look at how the cooperative agreements
[5:17:45] are structured to reach a cost alignment standard to balance the state's commitment of resources
[5:17:51] to such agreements.
[5:17:53] At this time, we're really not sure how this is going to impact the county fire department
[5:17:58] in the future.
[5:18:04] Moving on to some critical issues that we're to address.
[5:18:08] First I want to start with our staffing model.
[5:18:10] Currently, our staffing model in the county fire department is out of a combination model.
[5:18:15] A combination model consists of volunteer firefighters that are primary service delivery means for the county fire department,
[5:18:22] and they are supplemented by paid cal fire firefighters.
[5:18:26] On a national level, there continues to be a decrease in public volunteering.
[5:18:32] The National Fire Protection Association reports since 1986,
[5:18:37] statistics, the number of career firefighters per thousand population has stayed constant.
[5:18:43] What they are seeing is that same relevance for volunteer firefighters per thousand
[5:18:48] population is decreasing.
[5:18:51] Some of the reasons for the decline are associated with cost of living.
[5:18:56] Many families today rely on a dual income, both parents having to work to provide and meet
[5:19:01] their needs.
[5:19:02] The days of living and working in your community are not.
[5:19:07] People are having to change to that community society where they're on the road traveling to work,
[5:19:13] which also reduces their time to be able to give back to their communities.
[5:19:17] A notable reason in the time commitment is those requirements to meet standardized training.
[5:19:25] And today's standards, volunteer firefighters, need to meet the same exact requirements that paid professional firefighters have, which is a tremendous time commitment on them.
[5:19:36] Here locally the county fire department has seen an approximate 40% reduction in our volunteer firefighting force since 2008-2009.
[5:19:45] We're in the process of establishing better methods of identifying why members are leaving and separating service so we can improve our recruitment and retention efforts.
[5:19:59] One of the reasons that we have been able to identify is the recruitment of our new volunteers that are younger members are in the pursuit of a career in the fire service as a professional, and what we're finding as as they're successful in obtaining a career in the fire service, those new employees are not allowing them to volunteer any longer.
[5:20:21] There's a lot of different requirements with purrs and workers compensation that does
[5:20:25] not allow them to provide those same services elsewhere.
[5:20:32] We've also seen a reduction in the number of paid firefighters from 24-18 during the
[5:20:37] Amateur Contract period since 2008-2009.
[5:20:41] This reduction has diminished our abilities to meet NFPA standards for deployment of fire
[5:20:46] service operations for a combination fire department.
[5:20:51] NFPA 1720 is a standard used for combination fire departments that sets the standard
[5:20:57] for response to a standard residential structure fire in rural areas which states that we should
[5:21:05] be needing six firefighters at the scene of the fire in 14 minutes, 80% of the time.
[5:21:12] And suburban areas, which is all based on population base, which is a service area 500 to 1,000 folks for their study, increases that response to 10 firefighters in 10 minutes, 80% of the time.
[5:21:26] So current staffing levels that we see in county fire associated with the paid staff and the volunteer responses, we're only able to provide 4.3 responders per fire in the 14-minute time frame.
[5:21:38] the National Fire Protection Association recommends.
[5:21:42] The remainder of the staffing comes from outside the time frames and usually is from the
[5:21:48] Mutual Aid Department providing aid to us.
[5:21:52] The reduction in staffing has greatly impacted our ability to ensure a timely response that
[5:21:58] allows sufficient number of firefighters to operate safely and effectively on the scene
[5:22:03] of an emergency incident.
[5:22:05] Providing safety for our responders and the public is our number one priority.
[5:22:10] On your staffing is-
[5:22:13] Can we finish the presentation?
[5:22:15] We have a lot of stuff to do today.
[5:22:16] I want to finish the presentation and then we'll do the questions.
[5:22:21] Our next issue that's critical for us is our deferred maintenance of our facilities.
[5:22:26] Due to years of deferred maintenance of the county fire facilities,
[5:22:29] we're experiencing a significant increase in the cost for repairs and maintenance.
[5:22:33] An example is our Fall Creek Rift Repair and Replacement Project.
[5:22:39] Once the evaluation process has started for that facility to determine what the needs
[5:22:43] were going to be, the facility we were able to determine needed several additional items
[5:22:50] addressed to bring the facility into compliance with current code.
[5:22:55] We anticipate a 55% increase in the overall cost from our budgeted figure of $75,000 for
[5:23:00] that roof replacement and repairs.
[5:23:03] The current process used to determine the needs for that repair and maintenance are
[5:23:07] very time-consuming to be able to get the engineer reports and everything needed to actually
[5:23:11] get the bids out and get those bids returned has resulted in repair and maintenance costs
[5:23:17] increasing significantly from originally budgeted estimates.
[5:23:21] Our next item is our Mobile Equipment Replacement Plan.
[5:23:25] The County Fire Department, as other departments within the county, we have a lot of equipment
[5:23:30] that needs replacing over time.
[5:23:32] These fire engines respond to emergency calls for service day in and day out.
[5:23:38] Currently, we do not have an adopted mobile equipment replacement plan.
[5:23:42] We refer to this as a MIRP.
[5:23:44] The county fire department's fleet is aging and requires more maintenance as the years go on.
[5:23:51] The cause of these maintenance and repairs increases the out of service time for
[5:23:57] of these vehicles, as well as reduces the availability
[5:24:00] of that vehicle to respond to emergency calls.
[5:24:03] Though the County Fire Department has been able to purchase
[5:24:05] a few new fire engines over the past few years,
[5:24:08] as a result of money saved in the cooperative fire
[5:24:10] protection agreement with Cal Fire,
[5:24:12] these savings are a direct reflection of the drought.
[5:24:17] As a drought is coming to an end,
[5:24:20] and our fire seasons may not be as long,
[5:24:22] we may not see those savings.
[5:24:24] These savings are not a sustainable method
[5:24:26] or replacement for the approved mobile equipment replacement plan.
[5:24:30] With out reliable fire apparatus to respond to emergencies, our communities are at risk.
[5:24:38] And our last item is long term funding.
[5:24:42] The county fire department is not a general fund department.
[5:24:45] It relies solely on property taxes and a 1997 voter approved assessment fee.
[5:24:52] And then we also see some funding from grants when we're successful in that application process.
[5:24:57] The county fire department continues year after year to struggle with funding.
[5:25:01] As a direct result of the drought, county fire has been able to sustain the current service delivery system due to savings in that cooperative fire protection agreement with the extended fire seasons of Cal Fire.
[5:25:13] County fires in the process of developing information to conduct a tax poll to gather additional information from our communities to determine our next option.
[5:25:22] option, that option could be in resultant in a ballot to the voters for more funding.
[5:25:29] Other options that are under review and discussion is the Lathco fire study for possible consolidation
[5:25:35] of fire service agencies, as well as the distribution of state proposition 172 funds and the voter
[5:25:42] approved measure K funds.
[5:25:43] Both Prop 172, the 1993 tax increase in the Major K, the 2014 marijuana tax measures were approved by the voters to be used for public safety.
[5:25:55] That includes fire departments.
[5:25:57] However, the county fire department does not directly receive any funds from either funding source for any of our operations.
[5:26:05] And in closing, without a long-term solution of our funding problems for the county fire department, we will struggle to continue with emergency services.
[5:26:13] Thank you, Chief.
[5:26:14] I know Supervisor Capitad had questions.
[5:26:20] You said three firefighters versus two firefighters currently.
[5:26:26] Where are you?
[5:26:28] We're at two firefighters.
[5:26:29] So when we had that staffing reduction in 2008, 2009, we went from three-o staffing to two-o staffing.
[5:26:37] So we have two persons on the engine now versus what we had in 2008, 2009, where we had three.
[5:26:42] That's the state mandate really calls for what, two in, two out?
[5:26:47] Two in, two out is a mandate that we have for responding to structure fires.
[5:26:51] So, when you respond in and make entry into a fire, you need to have, for every two persons,
[5:26:56] and you need to have two persons out.
[5:26:58] Right. So, actually, you're running out about a half staff.
[5:27:02] Yes.
[5:27:03] Wow. That's rough. That's rough. Okay. Thank you.
[5:27:07] All right.
[5:27:10] Not to get on the, of course, Derri's thing, but this is a concern, again, I think I can see that we're going to be called,
[5:27:16] you're going to be called for emergencies that you can't fund so much, but, and then we blame for the, if you can't get there in time.
[5:27:26] Exactly. It's going to be very difficult, especially that influx of, of populace or tourism that's going to come to that area.
[5:27:33] The numbers of people we're talking about are just going to be tremendous and it's going to be very difficult for as far as
[5:27:39] Increased revenue. I mean you see that probably the most realistic way to go is just to call for ask for another tax
[5:27:47] You don't know you don't want to it's going to be very difficult as we've seen in the previous pollings that we've done
[5:27:53] It sometimes is not a favorable option
[5:27:57] But um, well, hopefully when we get done with our polling will be able to determine if that's going to be a favorable option or not
[5:28:02] And this doesn't have anything to do with this, 172, prop 172 funding.
[5:28:09] You don't have any, you don't have any to do with 172.
[5:28:12] We receive no funding from prop 172.
[5:28:15] They would like it.
[5:28:16] Yeah, they would like it, okay.
[5:28:19] I just had a couple questions.
[5:28:21] You mentioned in your first slide, I think, that the state is looking at these cooperative agreements.
[5:28:27] So we realize here in Santa Cruz County, we have a great cooperative agreement with Cal Fire.
[5:28:31] Can you give us any more information about what might be under consideration there?
[5:28:38] Yeah, the state has been looking at how those agreements are structured and how and what type of resources are utilized in those contracts.
[5:28:46] So for example, a cooperative agreement such as the one in Santa Cruz County where we utilize Firefighter 1s as a staffing model may not be allowable long term.
[5:29:01] They may be looking at a different classification more of a permanent firefighter position versus a seasonal firefighter position.
[5:29:08] They're already doing that in our Schedule A contracts where they have re-evaluated that position that can't be utilized in that long-term funding.
[5:29:16] So, if it's permanent firefighter position, what exactly does that mean for us then?
[5:29:22] Well, it would mean an increase in cost, but those positions can be permanent intermittent.
[5:29:27] So they would be a permanent employee, but they would be intermittently employed.
[5:29:32] Okay. All right. And then when you talked about the repair estimates, the cost going up a lot more for your structures, is that have anything to do with requirements that our planning department has or is it other requirements beyond that?
[5:29:48] No more so, I think it is when we come up with a budgeted figure, and by the time we get around to having all of the required elements, the engineering reports, and get it to...
[5:30:01] And in this case, for a lot of our facilities, when we get there, we're specifically budgeting for one item to be repaired, for example, the roof at Fall Creek. By the time we expanded that and we inspected the facility more thoroughly, it needed to have sighting and everything else brought up to code at that same time. So those are increasing the cost because of that deferred maintenance.
[5:30:24] Well, I'll just say, you know, county fire, I know it's not a mandated service for the
[5:30:30] county to provide, RCAO reminds us of that regularly, but we know that our rural residents
[5:30:36] without this fire service would not be able to get insurance on their homes.
[5:30:44] They wouldn't be able to sell them and not to mention this, the great work that the fire
[5:30:50] firefighters play in these communities. So we have a big challenge ahead of us in this next year
[5:30:57] trying to figure out a long-term funding strategy for county fire. And I'm committed to working
[5:31:02] on it and I hope my colleagues are because it's going to take all of us to figure it out.
[5:31:08] There's no more questions. I'm going to suggest we take a 10-minute break. We've been here for a couple
[5:31:14] flowers and I think would be helpful and so we'll be back at about five or four.
[5:36:43] We return maybe for the last time today for the February 28th Board of Supervisors meeting
[5:36:49] study session. I believe that our next is Health and Human Services, Mr. Palacios, do
[5:36:56] you want to make any introductions? No, I don't. There we go.
[5:37:03] Well, they've got a little
[5:37:04] I'll be salty here at the end of the day.
[5:37:10] Good afternoon, Ms. Denver Lake.
[5:37:12] Good afternoon, Chair Leopold, members of the board.
[5:37:14] I'm Ellen Timberlake, interim director of the Human Services Department.
[5:37:17] Thank you for the opportunity to address three emerging federal and state budget issues
[5:37:21] that will significantly impact our department in fiscal year 17-18 and beyond.
[5:37:26] I'll start at the federal level.
[5:37:29] As the Assistant CIO mentioned in his remarks, the uncertainty surrounding the repeal and replacement of the Affordable Care Act
[5:37:35] is a critical emerging issue for our county.
[5:37:38] Depending on what is passed and signed into law, we anticipate widespread consequences and impacts.
[5:37:44] Since the implementation of ACA, covered California has been a leader at the national level,
[5:37:49] enrolling record numbers of our fellow citizens into healthcare plans.
[5:37:53] Couple with the successful expansion of Medi-Cal to cover non-disabled and childless adults.
[5:37:58] California has reduced the number of residents in half, the largest decline in the uninsured rate of any state in the country.
[5:38:04] In Santa Cruz County, we reduced that number by 67% with just over 13,000 uninsured in 2016.
[5:38:13] This success has been supported through enhanced federal funding that if eliminated or reduced,
[5:38:19] shifts significant costs back to the states and county.
[5:38:24] As outlined in the initial House GOP replacement plan that was released earlier this month,
[5:38:30] that although congressional actions remain uncertain at this time,
[5:38:34] The general prohibitions of this plan make changes to tax credits,
[5:38:38] expand existing limits on health care savings accounts, and
[5:38:42] slowly dismantle enhanced federal funding for the Medicaid expansion program.
[5:38:48] See,
[5:38:52] too fast on the take here.
[5:38:54] Depending on the final provisions of any new law, over 14,000 Santa Cruz County residents who enrolled and covered California health plans could see some facet of their costs and quality of their coverage impacted.
[5:39:07] It, an additional 21,000 individuals newly eligible for coverage through medical expansion
[5:39:13] could also lose coverage.
[5:39:15] This group makes up almost 30% of our county's entire medical population.
[5:39:20] If this program was eliminated, health care for these new beneficiaries would likely shift
[5:39:24] back to the county.
[5:39:26] There are also secondary benefit enrollment impacts if the expanded program were eliminated.
[5:39:31] For example, under Senate Bill 75, the state established access for undocumented children
[5:39:37] in California to receive full scope Medi-Cal.
[5:39:41] In Santa Cruz County, 750 children are now benefiting from this program.
[5:39:46] If the federal government eliminates coverage for the expanded population, optional programs
[5:39:51] like SB 75 may be at risk.
[5:39:54] Additionally, many single individuals who signed up for Medi-Cal through the expansion program,
[5:39:59] have enrolled in CalFresh or general assistance.
[5:40:02] We anticipate enrollment declines in these benefit programs
[5:40:06] if the expansion program is negatively impacted.
[5:40:09] With regard to workforce impacts,
[5:40:11] any move to restrict access to Medi-Cal
[5:40:14] or reduce federal financial participation levels
[5:40:17] would likely impact our allocation
[5:40:19] which in turn would affect our staffing levels.
[5:40:22] It would also create a costly untangling
[5:40:25] and reprogramming nightmare
[5:40:27] measure of many of our automated benefit systems that help us establish eligibility.
[5:40:33] With uncertainty at the federal level, the governor's proposed 1718 budget is based
[5:40:38] on a current law structure, which means he incorporates no assumptions related to any
[5:40:42] future ACA actions.
[5:40:44] HSD's proposed fiscal year 1718 budget follows suit.
[5:40:49] We've included this chart of current sharing ratios in the medical expansion program to
[5:40:54] and illustrate potential impacts should this be eliminated.
[5:40:58] As you can see, fiscal year 1718 is the first year that the state is slated to pick up
[5:41:03] a 5% share per room cost.
[5:41:05] This 5% share represents $1.6 billion in state general fund with a total medical expansion
[5:41:12] budget of $18.9 billion.
[5:41:15] Under the current version of the House GOP plan, enhanced federal participation is reduced
[5:41:20] from 95% to 50% in 2020, leaving significant funding gaps at the state level, and likely shifting costs for this population back to the counties.
[5:41:30] Other proposed Medicaid changes like block granting or per capita financing would also lock states into historic spending patterns and force the state to re-evaluate and prioritize medical eligibility.
[5:41:44] Now, I'll move on to two emerging issues identified in the governor's proposed budget
[5:41:48] that we'll have significant impacts on our department and the county general fund.
[5:41:53] Let's start with the proposed cuts to the CalWORK signal location.
[5:41:57] The California Work Opportunity and Responsibility to Kids, or CalWORK's program,
[5:42:02] offers temporary cash assistance and employment services to eligible families who have children under the age of 19.
[5:42:08] This is California's version of the federal TANF program.
[5:42:10] The CalWORK's allocation supports four functions, eligibility, employment services, childcare, and our Cal Learn program, which serves the pregnant and parenting teams.
[5:42:21] Under the Governor's proposed budget, next year's CalWORK's allocation will be reduced by 10%.
[5:42:26] This reduction is on top of a current year allocation cut of 8% and is based on projected decreases in caseloads statewide, resulting from an improved economy and declining unemployment rates.
[5:42:38] The back-to-back reductions in allocations will have significant impacts on our department
[5:42:45] and the families we support, including proposed adjustments to our service model and the
[5:42:49] unfunding of some vacant positions.
[5:42:52] Reductions in the level of support for optional post-aid services like transportation and housing
[5:42:56] subsidies.
[5:42:58] Reductions and reductions in contract funding for some partner agencies.
[5:43:02] Over a two-year period, the impact of these allocation cuts is $2.4 million.
[5:43:09] The third emerging issue that has enormous implications for our budget and for all county departments is the elimination of the in-home support services, maintenance of effort or MOA.
[5:43:20] Before I explain the issue, let me give you a brief overview of the IHSS program and the drivers of cost and sources of revenue that support it.
[5:43:27] As you know, IHSS is a program that allows disabled seniors, adults and children to remain safely in their home thereby avoiding more costly out of home care.
[5:43:37] Recipients of these caregiver services are medical eligible and must have certification
[5:43:42] if they need assistance with daily activities of living.
[5:43:47] The two main drivers of cost in the program are consumer need and provider payments.
[5:43:52] Need is defined as the number of consumers that are eligible and the service hours they're authorized to receive.
[5:43:58] IHSS providers are paid an hourly wage to provide these services.
[5:44:04] I'm not touching it. What happened?
[5:44:06] I think just go back if you can.
[5:44:09] It's
[5:44:12] got a mind of its own.
[5:44:14] Yeah,
[5:44:17] that's your slides.
[5:44:21] Okay, here we go.
[5:44:24] We call that a preview.
[5:44:25] Yeah, thank you.
[5:44:28] Okay.
[5:44:29] IHSS providers are paid an hourly wage to provide these authorized services.
[5:44:33] They're also eligible for benefits over time and sick leave.
[5:44:37] IHSS entitlement cost, as well as our cost to administer the program.
[5:44:40] are shared by the federal, state, and county government.
[5:44:45] With the governor's proposed budget, the non-federal portion of these costs would shift significantly to counties.
[5:44:51] To understand the shifts, let me briefly describe the coordinated care initiative or CCI, and the new cost sharing rules that came with it.
[5:44:59] CCI is a joint-
[5:45:00] Senate State and federal demonstration project that was implemented in fiscal year 2012-13.
[5:45:05] To date, seven counties have participated in CCI.
[5:45:08] Collective bargaining for those counties was shifted to the state.
[5:45:12] We are not one of the seven participating counties.
[5:45:15] The goal of the pilot was twofold.
[5:45:18] One, achieve better outcomes for seniors and persons with disabilities who are eligible for both medical and
[5:45:23] Medicare by improving the coordination of their health and long-term care services through a single health plan.
[5:45:29] The second goal was to generate savings for the state.
[5:45:33] When CCI was implemented, the state also established a new IHSS MOU funding formula which changed cost sharing between the state and all counties.
[5:45:43] Each county's base MOU was set at IHSS actual expenditures for fiscal year 1112 with a required annual increase of 3.5%.
[5:45:53] As a result of this formula, counties share of costs has grown modestly and predictably over the last five years, as the state has taken on a relatively larger proportion of the program's rising cost.
[5:46:04] By statute, the state is required on an annual basis to determine if the CCI pilot is cost effective.
[5:46:11] Last month, the director of finance announced that the CCI is not cost effective.
[5:46:15] And in accordance with state law, this determination means that effective July 2017, the IHSS
[5:46:22] MOE will be discontinued.
[5:46:24] As a result in barring any subsequent change to state law, the county MOE formula will
[5:46:30] be rescinded and counties will go back to the 35% sharing ratio of non-federal IHSS cost
[5:46:37] before the MOE was established.
[5:46:39] The county cost will be affected by a range of factors that drive cost, including anticipated
[5:46:44] a growth in enrollment, the gradual increase of the state's minimum wage, and
[5:46:49] this current state rate cap of $12.10.
[5:46:54] For counties in 1991, realignment is the dedicated revenue source that we rely on to pay for our share of cost.
[5:47:00] It's a complicated structure, but suffice it to say that this primarily sales and
[5:47:06] VLF tax-based revenue stream, even in a period of economic growth, simply cannot support the magnitude of cost shifts.
[5:47:14] and future caseload increases and wage growth associated with IHSS.
[5:47:19] In fiscal year 1718 alone, the statewide impact counties is projected at $624 million with a potential hit of up to $3 million in Santa Cruz County.
[5:47:30] By fiscal year 2223, additional IHSS costs for our county balloon to $18 million.
[5:47:38] If we were to experience a recession, these numbers become more grim.
[5:47:42] It's important to note that with the elimination of the MOE, the governor assumes that counties pick up five years worth of prior caseload growth increases all in fiscal year 17-18.
[5:47:55] Under 1991 realignment, counties are paid in their rears for increased costs, so we would not expect to see even partial reimbursement for these costs until fiscal year 18-19.
[5:48:06] That's creating a major cash flow problem.
[5:48:09] The governor's proposal also assumes that counties pick up 100% of a non-federal share for any wage and benefit levels in excess of the current state cap.
[5:48:21] Once the state minimum wage exceeds Santa Cruz County's current wage rate of $11.90, we'll flip the bill for all non-federal cost up to $15.
[5:48:32] This
[5:48:37] chart shows the potential impacts to our county.
[5:48:40] The brown bar shows the additional cost we must pay above our current MOE.
[5:48:46] The cost increases above the yellow line are driven exclusively by minimum wage increases.
[5:48:53] And the blue levels represent our share of cost if the MOE were maintained.
[5:49:01] Future costs will also continue to accelerate due to demographics.
[5:49:05] As baby boomers age, a number of IHSS eligible adults will climb.
[5:49:12] The shortfall of 1991 realignment funds will also have serious impacts on other county programs.
[5:49:19] Since the first draw on 1991 sales tax revenue goes to paying for caseload growth,
[5:49:25] these projected IHSS cost increases will strip funds that currently flow to the health and mental health subaccounts.
[5:49:34] In turn, this directly impacts programs provided by the Health Services Agency as well as all
[5:49:40] county departments who rely heavily on general fund.
[5:49:45] With regard to impacts on IHSS consumers, the elimination of the MOE will not change
[5:49:49] the way we determine eligibility or authorized service hours.
[5:49:53] However, in 2020, we anticipated 7% reduction in authorized hours due to the sunsetting
[5:49:59] of a tax that helped restore these hours in 1516.
[5:50:03] Since we are not a CCI pilot county, collective bargaining for our IHSS provider wages and benefits will continue to happen at the county level.
[5:50:13] Finally, we anticipate funding shortages could impact staffing levels and work load.
[5:50:18] Earlier today your board approved sending letters to the governor and various legislative leaders and budget committees expressing your opposition to dismantling the CCI and eliminating the IHSSMOA.
[5:50:29] Similar letters have been sent by CSAC, along with the California Welfare Directors Association, and County Behavioral Health Directors Association.
[5:50:38] This proposal in its current form is untenable, and as such, HSD's proposed 1718 budget does not address the elimination of the IHS MOA.
[5:50:48] We have included our maintenance of effort plus a 3.5% increase only.
[5:50:53] Secondly, as further information unfolds on short and long-term strategies to mitigate financial hardship to counties and to address structural revenue deficiencies associated with 1991 realignment, we'll return to your board with a supplemental budget and or potentially a mid-year budget modification after the governor's final state budget is signed, and that concludes my remarks.
[5:51:17] Thank you. Are there questions? This may be a question more for Susan than the new which
[5:51:25] is a lot of this, we're dealing with a lot of uncertainty at the federal and state level.
[5:51:31] Are we really going to have to wait for the state budget to figure out what's going to
[5:51:34] have with the IHSS or do you expect that there'll be an agreement sooner or some indication
[5:51:40] sooner?
[5:51:41] I'd like to defer that to Carlos. I think he's got that information.
[5:51:48] We don't really know.
[5:51:50] Okay.
[5:51:51] I think there's a lot of uncertainty still.
[5:51:53] We think though that we will know by the time we have a supplemental.
[5:51:58] And so that's our hope.
[5:51:59] So that we think in the mid-year when the governor does his update,
[5:52:02] May 12th typically, that we'll have a more firm answer.
[5:52:05] And that allows us to do it through a budget supplemental budget adjustment.
[5:52:09] Worst case scenario is we have to do a mid-year.
[5:52:11] And then in terms of cow works, we did see in the earlier presentation that our unemployment
[5:52:17] rate is going down.
[5:52:20] So in terms of the impact on people, are we seeing that relative drop in our caseload
[5:52:27] that they're anticipating or?
[5:52:30] We are seeing a decrease in our caseload by about 15% over the last two to three years.
[5:52:36] I think the challenge for us is even though the caseloads have decreased, this particular
[5:52:42] program serves individuals in a community that has an incredibly high cost of living
[5:52:47] with poverty rates higher than the state average, both for families and especially for children.
[5:52:54] And we also, with our CalWORPS population and those that participate in welfare to work,
[5:52:58] have tremendous barriers and significant issues that we face on a daily basis in trying
[5:53:06] to support them.
[5:53:07] For instance, 60% of our welfare to work participants acknowledge having mental health issues close
[5:53:15] to 50% domestic violence issues with a quarter of the welfare to work population experiencing
[5:53:21] some form of substance use disorder.
[5:53:23] So part of our challenge with these decreasing allocations is that, in a community that is the type of poverty here that we have in the high cost of living, as well as the challenges of some of our welfare to work population, those allocation reductions don't really reflect the type of service support that is needed to help welfare to work in cowards participants succeed.
[5:53:50] I think the bleak I'll look that was presented is correct, although I had last week's board meeting of the CESAC,
[5:54:00] the California State Association of Counties, this is the biggest issue on their plate 624 million statewide.
[5:54:06] They did say Matt Kate, the executive officer of CESAC, did say that they've had continual meetings with
[5:54:15] governor Brown faced face and it was almost like, wow, he knew what was going on of course,
[5:54:22] but he didn't know it was going to be the significant of an impact.
[5:54:25] It was kind of a positive response, but nothing like it's going to just reverse it and have
[5:54:33] the state take on $625 million.
[5:54:36] But it was a little uplifting of the bad news by the end of last week at least, that he's
[5:54:44] in conversation with them about it, at least.
[5:54:47] All right.
[5:54:49] Correct my calculation here on, you know, the mathematics.
[5:54:54] But we would pick up the whole $3 million extra cost.
[5:54:59] Up to $3 million, we would pick that up.
[5:55:01] Right, in addition to the $6 million, all right.
[5:55:05] Okay, do we have that money?
[5:55:07] We don't have it.
[5:55:08] I mean, we don't have that money.
[5:55:11] We don't have the money.
[5:55:11] So the state raises the threshold, they're going to get money because they get state taxes out of, you know, somebody's payroll check.
[5:55:23] So they're going to keep all the money but shift the whole responsibility to us.
[5:55:28] It's not logical, it's not fair.
[5:55:32] Anyway, is that what it looks like is happening?
[5:55:35] Well, I think what's happening is that it's a convergence of a lot of unfortunate things all in one and one of the things that's happened is over time, the 1991 re-alignment source that was intended to support this IHSS program has been changed and modified, it is no longer the sales tax revenue, no longer supports.
[5:55:59] many of the changes in the policy changes of the state level.
[5:56:04] Let me give you two examples.
[5:56:06] When we established the MOE in 2012,
[5:56:08] that was prior to the state establishing a minimum wage law
[5:56:12] that gradually increased wages up to $15 in 2022.
[5:56:17] And the counties were not a part of that process.
[5:56:20] However, when the wages go up and the MOE is eliminated,
[5:56:25] We now hold 35% of those wage increases that we don't have the revenue to support through 1991.
[5:56:35] Add on to that, other issues like the fact that the state is not making any statements about changing the wage cap at 1210.
[5:56:46] When that happens, it creates an unbearable burden on counties to absorb all the non-federal share of cost.
[5:56:54] if the state continues to keep its wage cap at $12.10, even though the wages keep going up.
[5:57:00] We would be taking the whole burden without any benefit.
[5:57:04] Without any revenue.
[5:57:05] Without the revenue, which would be the benefit.
[5:57:09] IHS has already underpaid.
[5:57:12] I mean, they should get more, really.
[5:57:15] I don't know what we're going to do.
[5:57:16] We did face this about three, four years ago, right?
[5:57:19] Same kind of thing.
[5:57:20] I think the state did finally come through and help out, but we'll see who blinks first, sir.
[5:57:29] Well, I think they have control of the blinking.
[5:57:31] It's only a question of what's going to happen to us.
[5:57:35] You know, the three or four years ago when we dealt with this, it was because the state was trying to not do their share.
[5:57:41] and so we could aim our anger and the anger of the IHS recipients and caregivers to
[5:57:51] the state for in order for them to do it and they came through, right?
[5:57:56] Now the state is trying to get out of the business and put it all on us.
[5:58:00] They've raised the wage rates but they're not going to stick around to actually pay the
[5:58:08] increase wages.
[5:58:09] So that's the policy inconsistency at the very least.
[5:58:16] One of the things that you didn't cover in this, but I'm wondering what's going on.
[5:58:24] Two weeks ago, it's two weeks ago now, we had this raid here in Santa Cruz, in Santa Cruz and Live Oak.
[5:58:35] And what have we seen in terms of people seeking assistance as a result of those rates?
[5:58:45] Our staff have been attending every community event that we can participate in to attempt
[5:58:52] to provide accurate information to the community about public assistance and their access to
[5:58:59] public assistance and what that looks like right now.
[5:59:01] But I have to say that all the activities that are going on have absolutely led to individuals who currently are receiving some form of public assistance to be rethinking that on anecdotally, we are actually tracking trying to track this across multiple programs right now, but anecdotally on a daily basis, we have staff reporting to our managers that individuals are calling and saying, how do I get all of every program I'm on?
[5:59:29] So, we're absolutely concerned about this because right now nothing has changed in a law,
[5:59:35] but I think that some of the actions that are taking place with respect to ICE and other
[5:59:42] executive orders and draft orders are having an effect of creating a lot of anxiety and the
[5:59:49] community about what it means to be enrolled in anything, even if a law hasn't yet changed.
[5:59:54] And do you see a need, and maybe it's a question for your colleague?
[6:00:00] The colleague as well about providing resources to do the outreach necessary to help bring people back in because it's fear that's driving us. Not facts. And, you know, should we be, should we be thinking about doing some outreach? Because, you know, the people not getting their SNAP benefits as a direct, there's a direct hit on the health of our community.
[6:00:30] Well, I agree with you that we should be doing everything possible to outreach and give people facts about what it means currently to be on benefits and to give them accurate information and we're doing that now.
[6:00:44] We were at the Watsonville High School over the weekend and with people from our staff doing just that thing trying to enroll people on the spot,
[6:00:55] give them accurate information, and unfortunately, and sadly, we got a report on Monday yesterday
[6:01:03] that we had no takers.
[6:01:04] Even with all the accuracy of the information and being out there, people are genuinely
[6:01:09] afraid.
[6:01:10] So any ideas and any different strategies we were just participating in South County lunch
[6:01:15] today with a coordinated meeting across providers, school districts and the like, and we are looking
[6:01:22] to possibly put together or be a part of putting together a day-long event in North and South County
[6:01:29] to try to educate the community more deeply on some of these issues. So we will be at every event
[6:01:36] and do everything possible to educate our community about public assistance and their right and their
[6:01:42] access to those benefits right now and also to try to inform and address some of the understandable
[6:01:48] more anxiety than it could exist?
[6:01:50] Yeah, I do want to express my thanks to both you and your staff and Emily for being at
[6:02:00] the forum in Live Oak because I think it was very helpful for the community just a couple
[6:02:07] of days after this event to see county staff interested and wanted to help out.
[6:02:14] So I appreciate that I imagine we'll be doing more of that in Live Oak.
[6:02:17] So thank you.
[6:02:18] Thank you.
[6:02:19] You have last thing.
[6:02:21] I don't want to bring it up now for discussion because it doesn't quite fit, but the community
[6:02:25] programs does review, comes under human services.
[6:02:30] So I do have concerns about that and we'll talk about them at a later date.
[6:02:35] We have a letter coming to your board on March 14th that will give an update on the core
[6:02:40] investments process.
[6:02:40] I welcome any of your questions or concerns.
[6:02:44] I don't want to see some programs lift up, but thank you.
[6:02:49] Okay, not seeing any more questions from the Board, I'll ask Ms. DeWin.
[6:02:55] Yes, good afternoon, Chairman Leopold and other members of the Board.
[6:03:00] Jane Goen from the County Health Services Agency.
[6:03:03] Before I begin my briefing this afternoon to your Board regarding major emerging issues pertaining to the health service arena, on behalf of the agency, I would like to thank you.
[6:03:13] your board for this morning acknowledging and expressing condolences of our very last Mr.
[6:03:21] Dr. Bill Manoff and it was very difficult for our department in the last few days.
[6:03:28] Your caring is very much appreciated and our thoughts are with Bill's family and his
[6:03:34] friends.
[6:03:35] So thank you very much for that.
[6:03:36] So, this afternoon, following the informative presentation from our Assistant C.A.O.
[6:03:42] auditor controllers and my colleagues from other county departments on the behalf of HSA,
[6:03:48] I'm here to inform advice board of six major emergent issues that have far reaching potential
[6:03:55] impact at our local level.
[6:03:58] I would try not to repeat the information which you already heard from other departments,
[6:04:02] including the domino impact from the IHS-shifting cost-sharing arrangement between the state and counties because it does also impact on the health and public health and mental health realignment funds from 1991 funds.
[6:04:19] So I will not repeat that information.
[6:04:21] So, the sixth major emerging issue that I would like to take about 10 to 12 minutes to go
[6:04:28] over this afternoon are the uncertainty of the future of the Affordable Care Act.
[6:04:34] How can we not talk about that?
[6:04:36] It's at everybody's dinner table, discussion now a day, and it's on TV everywhere.
[6:04:42] And I want to talk about the second issue of very important as well is the potential change
[6:04:47] to the Medicaid structure and funding to states, and the third one is the actual loss of funding
[6:04:55] and anticipated further funding loss of our county mental health program.
[6:05:00] Fourth, the plan to recommend moving forward with launching drug medical expansion
[6:05:05] for our county, despite all these uncertainties, and I will explain that further.
[6:05:10] Fifth, we would like to briefly mention about the community interest in adopting law's law.
[6:05:16] or fighting appropriate alternative models to assist at risk individuals.
[6:05:23] There are not engaging in behavioral health and other necessary services.
[6:05:27] We'd like to mention that this afternoon, and we'll bring it to your board during budget hearing as well in details about this item.
[6:05:35] Last but not least, we would like to brief your board about the anticipated primary care funding cliff for
[6:05:42] or all community health centers nationwide.
[6:05:44] There is funding loss associate to that.
[6:05:47] So now I will brief your board with the first emerging issue,
[6:05:50] which is the potential review of the Affordable Care Act
[6:05:54] and a known replacement plan.
[6:05:57] So as your board know,
[6:05:59] briefly for general public reminder,
[6:06:02] the ACA became law in March 2010.
[6:06:05] It makes substantial changes to how healthcare services
[6:06:09] and health insurance coverage are provided nationwide.
[6:06:12] The major provisions of the ACA include
[6:06:15] number one insurance market changes,
[6:06:18] number two subsidized coverage for qualifying individual
[6:06:20] through federal and state health benefit changes,
[6:06:24] number three federal funding for an expansion
[6:06:26] of program eligibility in state Medicaid programs
[6:06:29] in California we call it MediCal.
[6:06:32] Number four additional federal participation,
[6:06:35] financial participation on other healthcare programs, and services, and
[6:06:40] number five, new federal revenues coming to states and locals.
[6:06:46] Vienna Progressive State, California took full advantage of the opportunities to expand and implement the ACA.
[6:06:55] Now, almost seven years later, after the law was enacted.
[6:06:59] California's healthcare landscape looked very different from 2013.
[6:07:05] with the full implementation of ACA, and you heard from Ms. Timberlake earlier the remarkable success in the number of Medi-Cal and Cover California enrollee, so I will not repeat that information.
[6:07:18] So the impact if this were to be repealed without knowing all the details, what part of it or how it's going to be replaced, if you could imagine if any of this would be repealed,
[6:07:29] We are looking at an increase, again, in our uninsured population, which is very sad and very unfortunate if that were to happen.
[6:07:39] According to the UC Berkeley Center for Labor Research and Education and UC LA Center for Health Policy Research,
[6:07:47] Santa Cruz County ranked second highest in the state of California in reducing its uninsured rate by 67%.
[6:07:55] We are right behind Solano and Stan Lewis, Stanislaus County, there are 68% with 67%.
[6:08:04] So who stands to lose if the ACA is repealed with a known replacement plan?
[6:08:10] It's very sad to say that lots of people, the poor, the low income, the working class people, the young and the old, those who have pre-existing medical conditions, those who have benefited from the ACA requiring all health insurance companies to ensure the tax.
[6:08:25] 10 essential health benefits in their coverage, and also the parity in
[6:08:30] payment and benefit coverage for health and behavioral health conditions.
[6:08:34] Not to mention the threat of federal funding loss for prevention and
[6:08:38] public health funds that would impact the entire population of the nation.
[6:08:43] Financial speaking, California would lose approximately $18 billion
[6:08:48] alone for leveraging the cost of Medicaid expansion population,
[6:08:53] for Santa Cruz, the economic impact would be approximately $86 million annually for HSA and
[6:09:02] then zoom it down to HSA.
[6:09:04] We projected approximately $12 million annual loss of federal funding alone just on the
[6:09:10] Medicaid expansion.
[6:09:11] I'm not talking about other public health prevention funding or the ACA related to the
[6:09:19] cliffs that I'm going to be talking about next.
[6:09:21] So with that, as you know, the dominant impact would be we would have to think about how to
[6:09:28] how to provide some type of health coverages for an insure population.
[6:09:32] We would lose all the good care coordination that have been going on across providers throughout
[6:09:37] county in the last six years.
[6:09:38] There has been great efforts of all providers trying to provide care coordination.
[6:09:42] It would be really greatly disrupted.
[6:09:45] And that of course prevention, early intervention, coordination and innovative care would be
[6:09:50] dissensifies.
[6:09:54] So right now in our plan to put in our recommended budget for next fiscal year,
[6:10:00] we have not included any of this impact because the details are unknown. We want to make sure that we
[6:10:07] remain vigilant, watching out what's going on at the federal and state level. We want to maintain
[6:10:13] prudent, we want to be sure that we are prudent in our funding in our budget and to prepare for any
[6:10:21] changes at the federal level and we want to make sure that we re-evaluate the relationship
[6:10:29] we have with the state regarding the financial relationship, financing relationship with
[6:10:34] the state as you recall. In 2014, the state recouped about $3.8 million from our county help
[6:10:42] re-alignment funds in anticipation of the reduction of the in and show of population, so we really
[6:10:48] lost that funding every year. So we need to rethink how we could work with the state to figure out the next financing relationship with the state would be.
[6:10:59] And Ms. Timberlake say we have to watch for the elimination of SB 85, which was the last in for the state to provide full scope medical coverage for uninsured undocumented kids.
[6:11:13] if they are going to do the last in-first out,
[6:11:17] that would be the first program would be impacted.
[6:11:20] And of course, we want to continue to work closely
[6:11:22] with our community partners for any approach
[6:11:24] to mitigate any of these cuts.
[6:11:28] So the second issue emerging that has also been known
[6:11:33] across the nation is the plan to restructure
[6:11:38] the Medicaid funding for states.
[6:11:40] So, there are talks about the federal government want to change the Medicaid to either a block
[6:11:49] grant program or put capital allocated program.
[6:11:52] Either those would have potential negative impact and a lot to be thinking about because
[6:12:00] with those changes, the state would be asked to manage with an amount of money like the
[6:12:08] block grants, we would get a fixed amount of dollars from federal for Medicaid program
[6:12:12] and it's up to the state and the local level to manage the population, whether there's
[6:12:17] a case look, growth, there's medical acuity level increases, et cetera, so we are at risk.
[6:12:23] The pro-capital grant, the pro-capital allocation also would be a problem because we again would
[6:12:29] have to look at how the state, the federal would look at the historical expenditure, what
[6:12:36] year, they're going to base that on for base year, baseline year, and what kind of growth
[6:12:40] they're going to give us, and also what kind of flexibility the Fed would give the state
[6:12:46] in order to manage and control the costs.
[6:12:48] So state might be thinking about ways to change eligibility criteria, medical necessity,
[6:12:55] criteria, or any type of services that could control costs, and that raise the concern as
[6:13:03] the rest of the nurse as the health director of Al County, I'm very concerned about any of
[6:13:06] those changes. Next, the third important emerging issue that actually already happening to Al
[6:13:17] County is right after you've already adopted the budget for HSA for this current fiscal year
[6:13:22] in June. A few months later this date turned around and cut out realignment funding by $2 million.
[6:13:30] So it's already impacting this fiscal year, and that has changed our base funding for 2011 realignment pot for Santa Cruz County behavior help.
[6:13:42] So we have done our best to observe that cost, but moving forward, that is the permanent cut every year to our county.
[6:13:51] And also starting next fiscal year, we anticipate losing approximately $1 million annually for the next 20 years from the Proposition 63 MHSA funds due to the state placing debt servicing obligation on counties for the $2 billion statewide initiative condo place like home housing bond.
[6:14:12] This is an exciting opportunity, however, at already a loss to our county in terms of our base funding.
[6:14:18] And we're hoping that we can continue working with the state to figure out a way to leverage
[6:14:24] the no place like home to support our community and no opportunity to recoup the funding.
[6:14:32] So because of that, we are faced with very tough decisions to make to bring to your board.
[6:14:38] we need to re-evaluate and reprioritize our service delivery system, including the contracted
[6:14:44] providers that we work with for behavioral services. And we anticipate to make additional
[6:14:51] requests of net county cost to reward during budget hearing, to offset some of the loss
[6:14:56] of revenue for behavior health and for increasing the
[6:15:00] The staffing costs in our operation.
[6:15:04] The next emerging issue is, I see that is an exciting thing, a good thing, is we plan to bring to your board very soon the plan to contract with the state to expand drug-medical services for our community. And I'm not going to bore your board with all these details. You heard about all these unmet needs and what we could do better. So if we were to move forward with this, we could double up the number of individual we serve for very important services, including case management,
[6:15:32] punishment for people who have substance use disorder, and we can leverage further
[6:15:37] federal funding for this. Now, this is a disclaimer on my part. This is pending
[6:15:42] what the Fed might do with federal funding. But I think we should move forward
[6:15:47] with a contract language with the state that we reserve the right to cancel the contract
[6:15:55] if, in fact, we would lose funding from the Fed.
[6:15:58] So the next very important issue as well for our community, you all have heard this.
[6:16:05] A lot of folks have talked to us about Laura's law.
[6:16:08] We know that every community we have individuals who might be at times at risk for themselves and for others.
[6:16:16] And there have been talk about Laura's law because statewide few counties have implemented the program very costly.
[6:16:25] Average cost per person is about $65,000 to $70,000 per person per year.
[6:16:31] We know from talking our staff looking at other counties, looking at our data and
[6:16:36] working with a lot of folks in the community, there are other alternatives that actually
[6:16:41] could provide us better services and cash the net wider in terms of solving this population.
[6:16:48] So behavior health director Eric Rair is not here right now, he's on vacation.
[6:16:53] But he and I plan to present this to your board during budget hearing with options that your board could think about how to support the community with further enhance and expand services to serve this very important population.
[6:17:11] I think this is the last one on my list to advise your board is the primary care funding cliff.
[6:17:17] So, as you know, about 70% of the federal grant funding for community health center nationwide are
[6:17:24] slated to sunset if there's no federal action is taken in my October 2017.
[6:17:32] So, we could lose about $1.2 million in funding for our local county clinics here.
[6:17:41] And, of course, the woman's health center was community health centers, and Salud would
[6:17:46] also be impacted by this.
[6:17:49] So we are working very closely with our national and state association to advocate to make
[6:17:55] sure that they will renew this funding for all community health centers nationwide because
[6:18:01] with that, this type of funding will be very difficult for us to sustain operation and continue
[6:18:06] to provide access to our very media population.
[6:18:11] In our budget, we did not reflect this loss because we're still waiting to see what
[6:18:15] happened next.
[6:18:18] With that, I would like to conclude my presentations and thank you very much for your
[6:18:22] attention.
[6:18:22] And if you have any question, I'd be happy to address.
[6:18:24] And I have very good staff in the audience as well that they could help answer any question
[6:18:29] that I might not know the answer.
[6:18:30] All right.
[6:18:31] We'll try to stump you.
[6:18:32] Thank you.
[6:18:33] Supervisor Capit.
[6:18:35] A quick, I want to thank both of you.
[6:18:37] And you're faced with both very tough decisions and some tough consequences that are going to come up in this year.
[6:18:46] So we'll support you the best we can.
[6:18:50] Thank you.
[6:18:55] I know it all adds up to, but it's not on the plus margin.
[6:18:59] It's unbelievable.
[6:19:01] If all this comes to pass, we're dead broke.
[6:19:05] I think every other county in the state is dead broke.
[6:19:08] I don't know, just have to work our best way out of it and thank you for the efforts
[6:19:14] that you're making and cooperating with others to do it.
[6:19:16] I know that you would and I just hope for the best because we just can't do it.
[6:19:23] This can't be, this is just not acceptable and we've got to do everything we can to not
[6:19:28] let it happen.
[6:19:31] Supervisor Coonerty.
[6:19:32] Yeah, just real briefly.
[6:19:33] I don't have any questions about meeting with both of you pretty regularly.
[6:19:36] talk about this but I think just because I know your teams in the department and maybe watching
[6:19:42] online that I appreciate that you both your departments although faced with these million
[6:19:49] uncertainties and thousands of challenges have also tried to figure out better ways to serve
[6:19:54] those who are most vulnerable and are looking at every approach possible and piecing together
[6:20:00] other dollars and so I work with both you on that and just I think that while the challenges
[6:20:08] are very real, I think I also appreciate your willingness to be flexible to best serve
[6:20:14] the people who are most in need and who be most impacted by these cuts.
[6:20:17] So thanks to both you and your teams for constantly looking at what they want to innovate.
[6:20:27] I'll just had a question or two to ask.
[6:20:31] You talked about the primary care fiscal cliff.
[6:20:37] And you talked about $1.2 million locally.
[6:20:41] Is that just the county's portion or the other clinics?
[6:20:45] Is the county clinics alone?
[6:20:46] Just the county clinics.
[6:20:47] The EQHC grant that we get, the funding that we get.
[6:20:49] Yes.
[6:20:50] So do we have an idea of what the, those other FQHC clinics, you know, the Santa Cruz
[6:20:57] community health centers in Salud?
[6:21:00] I think they about the same amount, a little less depending the volume of when they started.
[6:21:07] This happened before a couple of years ago and under the last president it got renewed.
[6:21:14] And so right now the association on a very concern, they're thinking maybe they could help renew it again,
[6:21:21] but again, we don't know with the new regime that we have right now in Washington, D.C.,
[6:21:26] we're not sure what's going to happen.
[6:21:29] Yeah, well, I've seen the President's doctor so I don't have great faith in his faith in the community health system.
[6:21:35] You talked about the drug Medi-Cal waiver program and funding and the questions we have about that and the benefits that we know will see.
[6:21:46] I know that we're that I think tomorrow we're submitting an application for this whole person care.
[6:21:54] And so how does that figure into the budget request or what's your thought about that?
[6:21:59] Yes, thank you, thank you for mentioning that because I spend the last 72 hours of waking
[6:22:05] moments to write that application and we should be able to submit that very tomorrow.
[6:22:11] So that project is a five-year project that we will be leveraging money from the federal
[6:22:17] to show innovation in connecting data with health and housing.
[6:22:23] And part of that project, we will leverage, we are going to be very innovative and we can
[6:22:28] way to report that to you, Supervisor Coonerty, as well, when you say that, I say,
[6:22:33] God, we got it, we got it.
[6:22:35] We actually going, this idea, the crisis should go to behavioral health,
[6:22:39] hemorrhagic, wirement, and Eric, and staff.
[6:22:41] They want to come up with this idea to serve the seriously mental adults with tablets
[6:22:47] that would be assigned to each of these 60.
[6:22:50] This is, the population is going to be 100 a year, but the 60 folks in that pilot project,
[6:22:56] It's going to be for seriously, not only for folks,
[6:22:58] will masterlies housing that we're going to be working with
[6:23:02] a contractor, to masterlies housing,
[6:23:04] and each of those clients would get a tablet.
[6:23:06] That would help them register their weight,
[6:23:09] their blood sugar, their vital size,
[6:23:11] and basic question like how are you feeling today,
[6:23:14] do you feel suicidal, you take medications,
[6:23:16] what's going on with you.
[6:23:18] So in that data information,
[6:23:19] we fed into our electronic health record system
[6:23:21] so that we can have a live nurse,
[6:23:23] a case manager to monitor those lines on a daily basis to make sure that not only the mental
[6:23:29] health will be improved, but also the physical health, because we know people who have chronic
[6:23:34] and persistent mental illness have a high rate of diabetes, hypertension, COPD, and obesity.
[6:23:41] So that's very innovative in that part.
[6:23:43] To answer your question about drug medical, it's also would be something that we could
[6:23:49] But this application does not allow counties to double-dip, so we have to make sure that whatever is available to Medicaid, whether drug-medical or short-doy, mental health-medical, we cannot apply those to these whole-person care concept services.
[6:24:08] So it have to be very clear delineation of not double-dipping, so we cannot leverage drug-medical for this whole-person care project.
[6:24:16] And can you tell us the timeline as for decision on the whole person care?
[6:24:22] Yes, the state anticipate to get back to county in July sometimes of their somewhat decisions.
[6:24:30] So we should know in July what happened with that.
[6:24:33] So would we be looking at some mid-year budget addition or correction or change?
[6:24:40] Possibly, yes, because if the state approves our application for year one,
[6:24:44] 75% of whatever we request and they approve would be loaded to us for first year.
[6:24:49] So first year is a baseline year, they pay us for implementation.
[6:24:52] And then second year, third, fourth, fifth year would be incentive pay for performance kind
[6:24:57] of deal.
[6:24:58] We have to prove that we have outcome in order to pay us.
[6:25:01] Yeah, well that's the first good news that we've gotten this afternoon.
[6:25:04] So thank you.
[6:25:06] I know if we tried hard enough, we'd find some good news.
[6:25:08] Yes.
[6:25:08] Yes.
[6:25:09] Yeah, well, it's clear from just the few departments that we've heard from today that there's
[6:25:15] great need out there.
[6:25:17] And whatever resources we have, we're going to have to make some very difficult choices.
[6:25:21] Knowing about whether people have basic services that those who are most vulnerable is always
[6:25:29] a priority for me, and I think it's been a priority of this board.
[6:25:33] So I appreciate you sharing this information.
[6:25:36] And I'm glad we had this mid-year review to be able to hear what's going on in the programs.
[6:25:41] Thanks, Ufeigh work, and thank you for the work of staff.
[6:25:44] Thank you.
[6:25:46] Okay, Mr. Sunshine's coming back up here.
[6:25:55] I also want to thank our department heads and all our department staff for the hard work they have done in preparing this mid-year report.
[6:26:03] And also in the work they're doing in the budget, we are deep involved in the budget right now and all our CAO and us are also working hard.
[6:26:10] And I wanted to just give you a little bit of a preview.
[6:26:15] General purpose revenues, we still haven't finalized our projections for next year.
[6:26:20] However, if you assume that our revenues continue to grow at the current rate, which they have
[6:26:24] this year and the prior year, they're growing about three to four percent a year.
[6:26:30] And so that is actually good news and that we continue to have moderate but steady revenue
[6:26:37] growth.
[6:26:38] And also, next there would be a milestone in that would be the first year of recovery since our general
[6:26:44] purpose revenues would be exceeding the revenues we had before the Great Recession.
[6:26:50] So we would finally be in recovery, which would be an important milestone.
[6:26:53] 10 years.
[6:26:54] We do know that we lost more than $10 million in the last recession that the revenues actually,
[6:27:03] general purpose revenues were very flat for many years and that we've only now hit next year
[6:27:10] would basically be recovering. So that's why we continue to worry about an upcoming recession.
[6:27:16] We know that in regarding expenses for next year, we know some of it. We know our salary and
[6:27:22] benefit increases will total about $7 million. We have other contractual increases of about
[6:27:28] a million. So we know that just in the status quo budget we have about $8 million to absorb
[6:27:34] just to achieve a balanced budget and that doesn't include all these other unknowns.
[6:27:39] And so these risk factors that you're very familiar with and you heard from summarized today
[6:27:45] included a number of issues due to the storm damage and our ongoing deficit and infrastructure
[6:27:52] to make sure spending also the issues that we're just talked about in home supportive services
[6:27:58] and affordable care act as well.
[6:28:01] And so when we look at trying to add those up, we know that it's very hard to determine
[6:28:09] right now.
[6:28:10] We know that in home supportive services that in the governor's revise is one key date that we may see some news
[6:28:17] and that will allow us to react by the time we have the budget.
[6:28:22] If that, another possibility is that there's some kind of extension of the current practice
[6:28:27] that would go into the next fiscal year would be more of a mid-year.
[6:28:31] Affordable Care Act, we know, is very unknown.
[6:28:34] Everyone knows that there's a lot of uncertainty at the federal level about that.
[6:28:38] We do know that the storm repairs are going to have to proceed
[6:28:42] and so we're going to have to work very hard to have some solutions included in the budget
[6:28:46] it as well as some longer term solutions to take care of the magnitude of the problem
[6:28:50] we face.
[6:28:52] So when you look at all the unknowns and you add them up, it looks like a scary number.
[6:28:56] The first three are the things that we know about that are pretty certain.
[6:29:02] So you get close to $10 million there in terms of what you need to absorb just sort of certain
[6:29:08] and then you have these other unknowns which you don't know about yet.
[6:29:14] The good news is that we have been able to absorb our status quo increases in the past
[6:29:20] few years just with revenue growth.
[6:29:22] It's really all these uncertainties from the state, federal, and then the storm damage,
[6:29:26] so it's other things affecting us out of our control that we're going to have to react
[6:29:29] to.
[6:29:30] And there are also points to the need on the future of doing strategic planning when you
[6:29:34] really can plan long-term to address some of these issues in a way that is more proactive
[6:29:40] in instead of reactive. That concludes the presentation we have for today and I want to
[6:29:46] thank the Board for your patience in sending through a very long afternoon session but I
[6:29:50] think it was very useful for all of us to hear the challenges we face as we go into developing
[6:29:54] this year's proposed budget.
[6:29:58] Thank you, Mr. Palacios.
[6:30:00] As I look at the TBD sheet, just in what we heard today, I see over $70 million, and that doesn't include the deferred maintenance on the roads. Given that we have a general fund of $128 million, when you said we only actually have control over 10% of it, it's sobering to think.
[6:30:29] What is, we will or won't be able to do in the coming year, and we're going to have to make some very
[6:30:37] difficult priorities. And there might, we've outlined some things in which there may be some other
[6:30:41] funding strategies, you know, going out to the voters, whether it be for fire or for roads, that
[6:30:51] there may, you know, the ACA may not crap out this year. It may wait another year
[6:30:56] until we lose $12 million there, but you can't look at it in any way that says it is
[6:31:07] in a huge hit to the county this year. Any closing remarks from my colleagues.
[6:31:15] I want
[6:31:16] to thank Mr. Palacios and all the department who's presented here today for their good work
[6:31:23] and putting this together, I think it's useful to do this at a mid-year rate to give some
[6:31:28] idea where we are and I appreciate the number of other departments who sat in to hear
[6:31:34] what was going on and so they understand sort of the challenges that we faced and the
[6:31:39] opportunities that are out there.
[6:31:41] Thank you very much and with that we are adjourned.